What tax benefits are available in regards to the home loans?

In the case of self-occupied property acquired or constructed out of borrowed funds, the deduction available for interest on capital borrowed is Rs. 2,00,000/-. In case of a rented property, the whole of the interest amount is allowed as deduction. The limit of repayment of housing loan qualifying for deduction under section 80C is Rs. 1,50,000/- (This covers Stamp Duty and Registration Fee).

What is the reducing balance method of interest payment?

In reducing balance you reduce the amount of principal payment already paid by you from the initial loan amount. You pay interest only on principal unpaid till that point of time and not the entire loan amount.

What is floating interest rate?

Also known as variable or adjustable rate, a floating interest rate is a type of debt including credit, loan, bond which does not have a fixed interest rate.

Do banks charge any processing fee for home loan?

Yes, banks do charge processing fees which usually varies from 0.25% to 0.50%. The processing fees is levied for the maintenance of your loan and once paid it is non-refundable.

How do I apply for home loan?

You can apply for home loan by approaching a housing finance company with a formal application. In addition to the application, you're required to submit your personal details to the bank to know about your loan eligibility.

What are the general documents required for home loan applications?

To apply for home loan, you would require Identity proof, address proof, age proof, proof of educational/professional qualifications, employment details, bank statement, proof of income, pan card, property details and auditor's report.

How much housing loan can one get?

Banks have set some parameters to determine the borrowing capacity of a candidate. The amount of home you get depends on your age, salary structure, liabilities and cash flow and expenses.

What is fixed interest rate?

A fixed interest rate loan is a loan where the interest rate doesn't fluctuate. This allows the borrower to accurately predict their future payments. Variable rate loans, by contrast, are anchored to the prevailing discount rate.