Consider carefully before taking a loan against property
by Finway FSC Empowering People FinanciallyYou can take a Loan Against Property in Delhi not
only for home renovation or commercial properties but also against a plot of
land. In fact, it is considered as the safest proposition for the banks as they
have collateral of the property in support of the finance they provide.
And, a salaried person can avail it for various
purposes such as educational needs of his/her children, medical expenses, home
renovation and many more, through mortgage loans. At the same time, the
business enterprises opt the Loan against property as collateral for business loans in Delhi and for
procuring working capital requirements. In fact, in present time, a loan
against property can be easily obtained due to its secure nature. Banks usually
maintain a margin, ranging from 50-90% of the property value also known as
Loan-to-Value, while sanctioning a Loan against Property. Further, this
facility is becoming popular because the borrower can utilise the property
despite mortgaging it in favour of the bank.
Eligibility for a loan against property
Current income - For a regular employee, the
salary slips of the last three months and bank account statements of the
previous six months are required. And, in the case of self-employed
professionals, financial statements such as Balance sheet and Income statements
are needed. You must complete these financial statements with the bank
statements enabling the banks to co-relate them.
Continuity of Employment - A letter from your
employer which proposed that the borrower is employed with them in addition
with the income tax form (Form 16), and IT returns of the past two years should
serve. A self-employed person has to submit proof of doing business such as GST
registration certificate, partnership deeds, and certificate of incorporation.
Current Obligations - One should have a net
income of 50% after accounting for all the EMIs, including the proposed one for
the Loan against Property. And therefore, a borrower needs to disclose his/her
current obligations.
Credit History - The lending banks are members of
CIBIL (Credit Information Bureau India Limited), who can pull out the records
to determine your credit score. Normally, a credit score in the range of 600
and over is acceptable.
Value of the Property – the eligibility of
purchasing a loan against
property highly depends upon the value of your property. An LTV ratio is in
around 40-70% of the location of your property is acceptable for most mortgage
loan scenarios.
Legal Scrutiny Report - To carry out the search
of the property, banks have panel advocates in the respective Sub-Registrar
office to ascertain the chain of ownership. Further, it enables them to
determine if there are any impediments on the property. This search is critical
as it allows the banks to understand whether you have the eligibility to create
the evenhanded mortgage in favour of the bank.
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Created on Mar 12th 2020 02:44. Viewed 350 times.