Lenders generally FINANCE for – 1. Buying under-construction / new or resale residential property 2. Renovation and Extension of exiting residential property
Normally FINANCIAL institutes finance maximum up to 80% (90% for loan amount below Rs. 20 lakhs) of the agreement value of the property. As per RBI notification, banks do not fund stamp duty and registration charges anymore.
Very few FINANCIAL institutes offer pure “Fixed” interest rate that remains fixed for the entire duration of loan. Nowadays, some lenders offer “Dual Rate” where the interest rate remains fixed for duration 1 – 10 years and then gets converted to floating rate of interest.
Normally, the interest rate is calculated as certain point above Base Rate for Banks and certain point above or below PLR ( Prime Lending Rate) for Housing FINANCECompanies. This difference is popularly known as spread.
Most lenders offers maximum tenure of 30 years but it is also restricted by the borrower’s age at the end of the tenure so as to ensure that the loan repayment ends on or before the retirement age of the borrower which is usually 60 years for salaried and 65 years for self employed borrowers.
Every loan has a costs attached to it like Processing Fees or Administrative fees which are non refundable, Legal fees payable to the lender or to the legal consultants of the lender, Stamp duty on creation of mortgage, etc.