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Home Loan

Home Loan is offered to individuals who wish to purchase or construct a house. The property is mortgaged to the lender as a security till the repayment of the loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it.

Home Loan is a Secured loan offered against the security of a house/property which is funded by the bank’s loan, the property could be a personal property or a commercial one. The Home Loan is a loan taken by a borrower from the bank issued against the property/security intended to be bought on the part by the borrower giving the banker a conditional ownership over the property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money by selling the property.

Through a Home Loan, one can purchase or construct a new house/apartment; a Home Improvement loan is offered to those who wish to renovate their houses; a Home Extension loan is for consumers planning to add extra space to their house such as a new room or a new wing; a Loan against Property is offered for a individuals seeking loan against an already existing property; a Land Purchase Loan is provided to consumers buying land as an investment, maybe to build a house later on and a Balance transfer loan is basically a home loan to pay off an existing home loan as this enables you to avail a loan with a lower interest rate.

In the entire process of home loan right from the application to the final disbursement, the sanction letter from a bank or financial institution holds a lot of importance.

Home loan sanction letter

  • A home loan sanction letter is issued by a bank or financial institution to an applicant who has applied for the loan. The letter is a proof that the applicant is eligible to avail a certain amount of home loan from its lender (bank or financial institution) subject to the fulfillment of certain terms and conditions as mentioned by the lender.
  • The sanction letter is not offered immediately to an applicant. Before sanctioning the letter, the bank or FI asks a list of documents to check the credit history and repayment capacity of the applicant.

Green Parivar Nidhi Ltd.'s Conditions for Home Loan:

  • 1.5% interest per month as Compound Interest Calculation,
  • 4 Guarantor required on Home Loan, Guarantor should be the member of Green Parivar Nidhi Ltd.
  • Gold Loan Available upto 80% of your Home's circle rate on current date,
  • Interst have to pay min. 3 Months of your Loan, If Loan wearer Pre-Mature his/her Loan within 3 Month.

For salaried employees, the documents include:

  • Passport size photograph of applicant
  • Id Proof (Pan card/ passport / driving license)
  • Residence proof (Tele Bill / Company Letter / Leave & License Agreement)
  • 3 months' salary slips / salary certificates
  • 6 months' latest bank statement of salary account
  • Form No.16 / ITR (Latest)
  • Loan outstanding letter with track record (If you have any existing loan)
  • Processing fees payable to the lender
  • Qualification certificate the applicant
  • Applicant's contribution details such as FD, PPF, recurring deposits,shares, mutual funds, etc.
  • Flat booking allotment letter

What does a sanction letter include:

  • The sanction letter from the Nidhi stating the Nidhi readiness to proceed with approval of the home loan include the following details:
  • Total amount of loan sanctioned
  • Tenure for repayment of the loan
  • Interest that will be applicable on the loan fixed or floating rate
  • Actual rate of interest that is applicable on the loan
  • Base rate at which the interest is calculated
  • EMI and pre-EMI amounts wherever applicable.
  • Period of validity of this sanction letter.
  • Terms and conditions of the bank for offering the loan.
Please remember that a sanction letter is not a legal approval of the loan. A home loan borrower still has to submit further documents and sign the loan agreement before the amount can be disbursed to him. Usually a sanction letter is valid for six months.

For a Home Loan, the basic registration charges, transfer charges and stamp duty costs are added to the cost of the home. Some other charges include.

1. Processing charge or booking fee – paid to the lender when you apply for the loan. It could be fixed or a percentage of the loan amount
2. Pre-payment penalty – if the loan is repaid before the agreed duration, some lenders may charge a penalty, up to 2% of the amount pre-paid.
3. Miscellaneous costs – there could be a documentation or legal fee, also known as “application fee”

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