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Loan against property FAQs

  • What do banks look in for to give a Loan Against Property?
  • Financial Criteria.
  • Property Criteria
  • Financial Criteria for Salaried
  • Income – There is a minimum salary criteria & it differs from lender to lender, but the least is net Rs. 15000/- pm.
  • Credit Score
  • Qualification
  • Residence Locality
  • Loan Repayment History.
  • Financial Criteria for Business Persons & Professionals
  • Type of Business / Profession
  • Profit shown in the ITR,
  • Turnover,
  • Depreciation
  • Business Vintage
  • Company Profile
  • Qualification
  • Ownership of Residence / Place of Business
  • Type of Accommodation.
  • Residence Locality
  • Loan Repayment History.
  • is net Rs. 15000/- pm.
  • Property Criteria for Mortgage Finance

vgg Types of Property Bank Mortgage

Residential Property -Most of the banks need the area of the to be minimum 400 sft built-up.
Commercial Property [shop] -Most of the banks need the area of the to be minimum 200 sft built-up.
Commercial Property [office] -Most of the banks need the area of the to be minimum 400 sft built-up.
The property needs to be legal i.e.: the structure needs to be authorized it needs

    • Municipal Approved Plan
    • Commencement Certificate [CC]
    • Occupation Certificate [OC]
    • In case of commercial property it needs to have clearance for commercial use from the authorities.
      The Documents needed for the mortgage of the property [residential / commercial] In case the property is in a society; we would need…
    • Share Certificate
    • Society Registration certificate.

(Photocopy of the plan, CC, OC & society registration certificate is required; these are available with the society, It is the right of the seller / buyer to have a photocopy of these documents)
If the property is still in possession of Builder the NOC from the builder would be needed from the builder.

  • Legal Matters for Mortgage Finance

Society NOC: Almost all banks ask for society NOC in their formats. To obtain this all the dues & transfer charges of the society needs to be cleared. It is mandatory for the committee to issue the NOC in the prescribed banks format under Maharashtra Co-operative Society Act, 1960 u/s 79(2) (a)

  • Loan to Value Ratio [LTV]

Explanation- It is the percentage of “Loan Amount” that can be provided with respect to the Value of the Property.
Example – If the cost of property is Rs. 10, 00,000/- & we provide a loan of 80% which amounts to Rs.8, 00,000/- . In this case the Loan to Value Ratio [LTV] is 80%.
It is also called Loan to Cost Ratio [LCR]
The LTV is calculated on the Cost of Property [COP]
COP = Agreement Value + Stamp Duty + Registration.
Most of the Banks now a day’s do not exceed LTV of 70%. for residential properties .. the LTV for vacant & rented properties is approximately 5% to 10% lower than the LTV provided for self owned properties.
Most of the Banks now a day’s do not exceed LTV of 55%. for residential properties .. the LTV for vacant & rented properties is approximately 5% to 10% lower than the LTV provided for self owned properties.
[LTV is the prerogative of the respective banks. Please confirm with them before applying.]

  • How much tenor does a bank give for Mortgage Finance.

Salaried – Resident Indian 1year to 25years (different banks have different tenors, but 25 years is the max.)
Business Person & Professionals – 1year to 20 years

  • Age Band for Loan Against Property.

Salaried – minimum entry age is 21 years and maximum exit age is 60 years.
Self employed – minimum entry age is 25 years and maximum exit age is 65 years.

  • Geo Limits for Loan Against Property.

Every bank’s have demarcated their Geographical Limits and are comfortable lending in those areas this is mainly due to collection restrictions.

  • Tax benefit on Loan Against Property.

Unlike Home loan there is no Tax Benefit for a salaried person for a Mortgage Loan taken against property. A business person can show the principle and interest paid on the loan taken against property on the expense side and thus availed Tax Benefit.

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"LoansMumbai provides you with excellent customer care service"
LoansMumbai has provided me with excellent services,
when it came to solving my every single query.
Due to their 24*7 support the Sanction and Disbursement
process was organised & effortless. Thank You to
Team LoansMumbai.com
Harveer Singh

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