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Plot loans are more restrictive and available only in respect of non-agricultural plots bought specifically from statutory authorities or developers approved by the specific lender. Normally,lenders will not finance more than 60-65 per cent of the total cost of the plot and the remaining 35-40 per cent has to come from your own sources. Different banks presume certain portion of your income as available for payment of EMIs of loans. It varies from bank to bank and there is no standard norm. But normally the bank will assume around 45-50 per cent of your net salary is available for payment of EMI to serve all the loans. Hence,your existing loans will also have an impact on your loan eligibility and the lender will calculate the eligibility based on the existing outstanding amount and the EMI being paid now.

I want to purchase a residential house,which is 10 years old. Is there different criterion in banks to give loans for old property than new property? What percent of total amount of this property I can get the home loan?

R A Kanoria,Delhi

You can get a home loan to buy a new or a resale property based on your income and the title of the property. The age and the condition of a building has a bearing on loan eligibility. Banks are normally reluctant in lending money for a property,which is very old. In your case,as the property is only 10 years old and if it is in a good condition,there should not be any problem in getting loan from any bank. Most banks give upto 80-85 per cent of the cost of property as a home loan. Please note that most banks get the property valued independently and will provide the loan based on their value rather than the cost mentioned in the purchase agreement. The valuation as determined by the bankers valuer is significantly lower than the actual cost and hence your effective down payment goes up.

I am planning to buy a house worth Rs 37 lakhs and would be going in for a home loan. Should I go ahead right now or should I wait?

Jayashree Pandit,Daund

The best time to buy is when you have the necessary resources to pay the down payment and are reasonably confident of your income in the future to meet the EMI payment. Dont try to time the market,as it does not make sense. The only exception to this rule is when the market is overheated and expected to cool off in future. But even here you should begin searching and negotiating a deal for you dream home. Just be aware that currently these are a good scope for negotiating the price and you should take advantage of this situation to secure a good deal.

The expert is CEO,Apnapaisa.com
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