Housing Loans I
 

Housing is a dream beyond the reach of common army personnel (even with Fifth Pay Commission salaries).
The only way out is to take a housing loan.
Most people find it difficult to choose the right agency, as they are not familiar with the dynamics of housing loans.

From where can one get loan?

One can get loan from any of the following housing loan agencies:

(a)     Housing Building Advance ( Govt. HBA) Through AG’s Branch for serving personnel only provided the cost of flat is not more than Rs. 22.5 Lacs.

(b)     House Building Advance from Army Group Insurance Fund ( AGIF )

(c)     Housing Finance Companies like HDFC, HUDCO, LIC HF, GIC HF, Dewan HF Ltd etc.

(d)     Nationalised and other banks like SBI, PNB, OBC, IOB, Canara, Syndicate, ICICI, UBI, Indian bank, Citibank, Bank of Baroda & Vijaya Bank.

 
Can one take two loans at a time for the same property?
 Yes, two loans can be availed provided first loan is taken from Govt (In case of AWHO allottee - AG's Branch), ICICI Bank is agreeable to give second loan to AGIF loanees also.
 
How much loan can one get?

The Loan amount is as under:

(a)     Maximum loan from Govt (HBA) for AWHO property is Rs 2.1 lac (provided the cost of flat is not more than Rs. 22.5 Lacs.

(b)     Maximum Loan from AGIF is Rs 15.0 lac but the actual amount of loan is determined by the net salary one receives and the number of years of residual service.

(c)     Repayment capacity is one of the main criteria for determining the loan amount. The loan amount cannot exceed 85% of the cost of the dwelling unit (DU). Most agencies give only upto 75% of the cost of DU.

(d)     Most of the agencies grant loan upto 35 - 40% of one’s gross income for four yrs if the allottee is below 45 yrs of age and 35– 40 % of gross income for three yrs in the allottee is more than 45 yrs of age. ICICI Bank may give loan proportionate to 55% of income as EMI.

(e)     AGIF takes only the salary into consideration but Housing Finance Companies and Banks can take the co-owner’s / spouse’s income and also income from other sources into consideration for calculation of Loan amount eligibility.

 
How much time one gets to repay the loan?

(a)     Govt and AGIF(HBA) loans are to be repaid six months prior to the age of retirement.

(b)     Most of the agencies allow upto 15 years repayment period but some extend the period upto 20 years. Provided the age at the time of maturity of loan is 65/70 yrs.

(c)     Actual repayment period is based on the age of the borrower, as most of the agencies grant loan so that the loan is repaid before the time till an allottee turns 65 . In some cases loans maybe granted to be repaid till the age of 70 depending upon the merit of each case.

 
What security is to be given to avail the loan?

(a)     One has to mortgage the allotted property to the loaning agency which means that the DU cannot be sold or transferred to any other person till the time loan is liquidated.

(b)     In addition to mortgaging the property, some agencies require:

·         Surety

·         Guarantor

·         Tripartite Agreement between the construction agency ( AWHO in this case), loanee and the loaning agency

 
What is the procedure of loan repayment ?
Loan is repayable in Equated Monthly Instalments (EMI’s) which comprise principal and interest. In case of AGIF, EMIs are deducted by CDA(O) whereas other agencies take postdated cheques. In the case of Govt Loan ( HBA) principal amount is recovered first in instalments and the accumulated interest is recovered thereafter also in instalments provided individual's service so permits.
 
When does a loanee allottee apply for Income Tax rebate ?
Rebate under section 24(i) of IT Act can be claimed only after possession of alltted DU is taken over by him.
 
Who can claim tax rebate on Home Loans ?
  • You have to be owner to claim tax benefit for a house loan.
  • A son/daughter can take home loan for property that is owned by his/her father. But he/she can not claim tax benefit if he/she does not have ownership right.


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