Providing finance against mortgage of immovable property situated in Metro/Urban/Semi Urban centres, is designed to offer instant solutions relating to business needs or for personal needs such as, children's higher education, travel, daughter's marriage, medical emergencies, etc.
A loan against property loan can be applied for either individually or jointly. Owners of the property will have to be co-applicants but co-applicants need not be co-owners. Generally, the loan can be availed up to 40% of the market value of the property (including the cost of the land). But this percentage can go up on a case-to-case basis. A technical valuer will ascertain the market value of the property and the loan amount will be decided accordingly.
The rate of interest for the loan is available in fixed and floating form. The security for the loan will typically be a first mortgage of the property against which the lender will advance the loan. Additional securities in the form of bonds, shares, fixed deposits, etc. may beoffered in some cases. There are limits on the maximum loan tenure and the loan amount and will vary from institution to institution.
All leading housing finance companies and banks like HDFC, CitiBank, ICICI Bank, Birla Home Finance, LIC Home Finance, PNB Home Finance, etc. offer these loans. But these institutions have certain norms to evaluate one's repayment capacity and the loan is offered only after ascertaining that aspect.
However, there are a lot of people who would want to take a loan against their property but don't have income to show on paper. These could be self-employed or businessmen who don't declare their entire income either to save tax or some other reason. Many Companies cater to the demands of such people. These people have to pay a premium for not having income on paper. However, this rate of interest could go down to as low as 13% or as high as 20% depending on the credit profile of the individual.
The market is catering to the requirement of every type of customer and every monetary need. The trick is to select the institution that offers the most competitive rates according to one's risk profile.
