Getting Loan Against Home in India or the mortgage of home

Loan against home connotes a loan that is given or disbursed against the mortgage of home, as a certain percentage of market value of the property. Generally, the loan amount that is sanctioned ranges from 40% to 70% of the market value, with a minimum threshold limit of Rs 2 lakh. A loan against home works out to be much cheaper than personal loan. The rate is lower because the lending entity has a security in the form of the housing mortgage vis-à-vis a personal loan that is given without any security.

The tenure for repaying loan against home has an upper limit of 10 years. The loan can be taken for any purpose and the customer is not required to disclose the motive behind the loan, to the lending authority. The criteria for loan against home are same as that of a home loan. Part prepayment as well as full prepayment of the loan is generally allowed by most lending institutions, though with a charge. Loan against property is available in case of both residential and commercial property. Many housing finance companies allow individuals to take loan against home even if they have taken a housing loan from them.

Amount Of Loan Depends Upon

Your income, savings, debt obligations

Cost/value of the property mortgaged

Your repayment track record for other loans, credit cards, etc

Number of years in service/ business

Eligibility Criteria

Salaried Individuals

Minimum Age of Applicant: 21 years

Maximum Age of Applicant at the Time of Loan Maturity: 60 years

Minimum Net Monthly Income: Rs 12,000 per month

Self-employed Individuals

Minimum Age of Applicant: 21 years

Maximum Age of applicant at the Time of Loan Maturity: 65 years

Minimum Annual Income: Rs 1,50,000 per year

Documents Required

Proof of Residence (Copy of Ration Card/ Telephone Bill/ Electricity Bill/ Voters Card)

Proof of Identity – (Copy of Voters Card/ Drivers License/ Employers Card)

Bank Statement / Passbook, for past 6 months (where salary/ income is credited)

Salary Slip for last 3 months, with all deductions

Form 16 for the last 2 years

Copy of all Property Documents

In case of self employed professionals, apart from the above documents, certified financial statement for last 2 years is required
Two passport size photographs

Other Details

Generally, loan processing charge of 2% is levied.

Pre-payment is allowed after 6 months. Generally, prepayment charge equivalent to 4% of the outstanding principal is levied.
In most of the cases, the minimum amount of loan against property is Rs 25,000 and the maximum amount is Rs 1.5 crore (Rs 15 million).

The charges that might apply in case of loan against property are processing fee, pre-payment fee, charges for changing from fixed to floating rate of interest and charges for changing from floating to fixed rate of interest.