Home Loan eligibility – your doubts busted here

Home Loan eligibility

Before even looking out for a property, buyers like to know the quantum of home loan they are eligible for. While that’s a good approach, there is always more clarity needed to make the final decision. We have attempted to throw light on some aspects to aid your decision making.

Banks or financial institutions determine the home loan eligibility of an applicant based on the valuation given to them by the evaluators they appoint. Your loan eligibility is also derived on the basis of your income, your regular outgoings and repayment track record. Your overall loan eligibility will be restricted to 80% of the agreement value or the valuation as determined by the bank, whichever is lower. Some banks also offer 90% of the agreement value to lure borrowers.

What is the eligibility for joint owners of a property and its tax implications?

To avoid Title issues later, it is a good idea to buy a property in joint name. The joint owner must become a co-borrower when applying for loan. In case the second applicant is also employed, it helps to improve your eligibility in terms of the loan amount. If the loan is taken in joint names and the property is self-occupied, both applicants can claim deduction under Section 24 (B) up to the limit of Rs 2 lakh each as well as claim deduction u/s 80 (C) for repayment of principal portion of the home loan.

 What is the time allowed between plot purchase and construction in case of composite home loan?

While Different banks have different clauses for starting construction on a plot, most banks permit a period of one to two years, within which, the construction must begin. If you construct the house within a year from purchase of the plot, the bank may give you home loan including cost of plot of the land. No tax benefits are available in respect of loan to buy a bare plot or in any year during which the construction is not complete.

 Can you get two home loans on a single property?

It is not possible to get two separate home loans on the security of the same property. However, you can avail a joint loan with a co-applicant if your incomes can justify the higher quantum of loan. You can get the tax benefits on the loan repayments provided you are an owner or a co-owner in the said property.