Before approaching a bank for your home loan,you should ensure certain checks are in place. Here is partial checklist: Ensure that down payment is more than the required 20 per cent. You need to pay stamp duty and registration charges from your own pocket as per the new rules. Understand the nature of the interest rate scheme you are opting for. Ensure you are eligible for the loan amount required in terms of the income-debt ratio,i.e. banks generally finance only 40-50 per cent of your income as loan. To ensure you have a repay your debt without any hassle,try and shore up six months of EMI in case there is a slump in cash inflow.

I am a senior citizen receiving a pension of R2.6 lakh per annum and I need to pay income tax. I also have taken up a reverse mortgage loan on a self acquired property and repaying a home loan as well. Can I claim tax benefits on my home loan interest as I pay a portion of my loan through the reverse mortgage payment I receive?

G S Sodhi,Ambala

If you have a home loan,it really does not matter from which source you pay your home loan,you would still be eligible to claim tax benefits on your interest. In that respect,you should consider incoming money from various sources as a single pool,when you need to factor in outgoing money that is eligible for tax exemption. So,go ahead with it.

My husband and I recently took a home loan. We plan to prepay an amount of R10 lakh this year. I hear only tenure gets reduced if we do this. Is there any way we can reduce our EMI?

Sujata Patil,Pune

When you make a part-payment,the amount will be deducted directly from your principal,which means you will pay up your loan faster than the term it requires. If you reduce your EMI the opposite happens,your loan tenure increases. It sort defeats the purpose if you choose to prepay partially and also opt for a reduction in EMI. Banks always consider requests such as yours,depending on the individuals situation. Since you are opting to partially prepay the bank should ideally have no issues in honouring with your request. The expert is CEO,Bankbazaar.com

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