Searching for a home loan is as important as you search for a perfect house. It is also important to know if the property you choose is eligible for home loan.
Getting home loan has become simple these days, with many banks and financial institutes providing lower interest rates. But it is always important for the banks to consider if the property is eligible for home loan.
Hence, the first step by the banks when you apply for a home loan is, informing whether the property is eligible for home loan. In India, financial institutes are relatively flexible than nationalized banks.
However, the banks as well as financial institutes, in their websites mention the builder’s name list or property’s name list. It is easier for those who want to self-check before even applying for home loan. The list is maintained for all those properties which are already legally checked and which are already under home loan.
All the nationalized banks or private banks are particular with the government certificates and also the technical and legal issues of the property. If there is a deviation in the property, it is always better to opt for a financial institute or NBFC for a home loan.
It so happens at times with the under construction properties, the builder recommends a bank for home loan. Though the property is under violation, the builder might manage to get a tie-up with a bank.
Loanyantra recommends to go for a thorough check before even applying for a home loan and before even looking forward to get that home.
Searching for a home loan is always made easy with us. Just give us a missed call to 040-71011991. We do it right for everything you need for a home loan.
Gone are the days – applying for a home loan again and again on the same property even when you are in home loan already with the property. Central Registry, a Government Company by the Public Sector Banks and National Housing Bank, formed in 2011, closed all the ways to take loan from multiple banks on the same property.
Once the loan is sanctioned by the nationalized banks, central registry has all the respective details. So, if an individual applies for the loan on the same property again, it is impossible to avail such loan. One can apply for a balance transfer but cannot avail two home loans on same property.
CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India), came into effect from March 31, 2011.
It is mandatory that all the banks register in the central registry, the mortgage within a month it is offered.
What CERSAI Does
* Maintains a central registry of property on which loans have been availed.
* Develops a web-based system for financial institutions and general public to access the information on mortgaged property.
* Collects and decimates information regarding the amount secured by the charge on the collateral.
* Maintains history of charges created and satisfied on a particular property.
* Enables lenders to get real-time current information regarding the security offered by the borrower.
* Provides potential buyers information about any encumbrance on the property they intend to buy.
* Prevents fraudulent transactions arising out of the same asset being mortgaged to multiple lenders
How Does CERSAI Help The Individual :
Not only the banks, but also the public can access by filling a form. One can get to know if their suggested property is already in loan by paying a minimal fee.
CERSAI reduces the fraud practices such as forging the documents for getting a loan, getting two home loans on the same property, etc.
One can always check if the property has been registered and if it is under a loan
But one cannot take into account properties on which loan has been borrowed from a non-banking finance company. This will again limit the registry’s ambit.
How Loanyantra Works :
Loanyantra, first online home loan management company, manages your home loan from the time you start your home loan search. We help you to know if your property is eligible for home loan and get you home loan from your favorite bank.
After a lot of opposition, deliberation and several amendments, the Rajya Sabha has, on 10 March 2016, approved the Real Estate (Regulation and Development) Bill, 2016 (Bill/Act) which substantially amends the original Real Estate (Regulation and Development) Bill, 2013.
The Bill largely seeks to protect the interest of the allottees/purchasers by promoting transparency, accountability and efficiency in the construction and execution of real estate projects by promoters. It also holds the promoters accountable for not registering their projects with the Real Estate Regulatory Authority (Regulatory Authority) or for providing insufficient information regarding their project. In addition to the promoter and allottees, the Bill also brings real estate brokers who facilitate the sale and purchase of units in a project within its ambit.
The salient features of the Bill are the following:
Real Estate Regulatory Authority
Under the Bill, instead of a regular forum of consumers, the purchasers of real estate units from a developer would have a specialised forum called the “Real Estate Regulatory Authority” which will be set up within one year from the date of coming into force of the Act. In the interim, the appropriate Government (i.e., the Central or State Government) shall designate any other regulatory authority or any officer preferably the Secretary of the department dealing with Housing, as the Regulatory Authority.
Registration with the Regulatory Authority
The promoter has to register their project (residential as well as commercial) with the Regulatory Authority before booking, selling or offering apartments for sale in such projects. In case a project is to be promoted in phases, then each phase shall be considered as a standalone project, and the promoter shall obtain registration for each phase.
Further, in case of ongoing projects on the date of commencement of the Act which have not received a completion certificate, the promoter of such project shall make an application to the Regulatory Authority for registration of their project within a period of three months of the commencement of the Act.
The following types of projects shall not be required to be registered before the Regulatory Authority:
Where the area of land proposed to be promoter does not exceed 500 square meters or the number of apartments to be constructed in the project does not exceed eight apartments. However, the appropriate Government (Central and State Government) may, if it considers appropriate, reduce the threshold limit below 500 square meters or eight apartments;
Projects where the completion certificate has been received prior to the commencement of the Act;
Projects for the purpose of renovation or repair or re-development which does not involve marketing, advertising, selling and new allotment of any apartment plot or building.
The application for registration must disclose the following information:
Details of the promoter (such as its registered address, type of enterprise such proprietorship, societies, partnership, companies, competent authority);
A brief detail of the projects launched by the promoter, in the past five years, whether already completed or being developed, as the case may be, including the current status of the projects, any delay in its completion, details of cases pending, details of type of land and payments pending;
An authenticated copy of the approval and commencement certificate received from the competent authority and where the project is proposed to be developed in phases, an authenticated copy of the approval and commencement certificate of each of such phases;
The sanctioned plan, layout plan and specifications of the project, plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof and the locational details of the project;
Proforma of the allotment letter, agreement for sale and conveyance deed proposed to be signed with the allottees;
Number, type and carpet area of the apartments and the number and areas of garages for sale in the project;
The names and addresses of the promoter’s real estate agents, if any, and contractors, architects, structural engineers affiliated with the project; and
A declaration by the promoter supported by an affidavit stating that: a) he has a legal title to the land, free from all encumbrances, and in case there is an encumbrance, then details of such encumbrances on the land including any right, title, interest or name of any party in or over such land along with the details; b) the time period within which he undertakes to complete the project or the phase; and c) 70% of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.
Under the Bill, developers can sell units only on carpet area, which means the net usable floor area of an apartment. This excludes the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.
70% of realisation from allottees in a separate bank account
The Act mandates that a promoter shall deposit 70% of the amount realised from the allottees, from time to time, in a separate account to be maintained in a scheduled bank. This is intended to cover the cost of construction and the land cost and the amount deposited shall be used only for the concerned project.
The promoter shall be entitled to withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. However, such withdrawal can only be made after it is certified by an engineer, an architect and chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project.
The promoter is also required to get his accounts audited within six months after the end of every financial year by a practicing chartered accountant. , Further, he is required to produce a statement of accounts duly certified and signed by such chartered accountant, and it shall be verified during the audit that (i) the amounts collected for a particular project have been utilised for the project; and (ii) the withdrawal has been in compliance with the proportion to the percentage of completion of the project.
Acceptance or refusal of registration
Upon receipt of an application by the promoter, the Regulator Authority shall within a period of 30 days, grant or reject the registration.
Upon granting a registration, the promoter will be provided with a registration number, including a login Id and password for accessing the website of the Regulatory Authority and to create his web page and to fill in the details of the proposed project.
If the Regulatory Authority fails to grant or reject the application of the promoter within the period of 30 days, then the project shall be deemed to have been registered.
The registration, if granted, will be valid until the period of completion of the project as committed by the promoter to the Regulatory Authority. This period shall be extended by the Regulatory Authority for a period not exceeding one year in aggregate, only due to force majeure and on payment of such fee as may be specified by regulations made by the Regulatory Authority.
Revocation or lapse of registration
The Regulatory Authority may revoke the registration granted on receipt of a complaint or suo moto or on the recommendation of the competent authority in case (i) the promoter makes a default in doing anything required under the Act or the rules or regulations made thereunder; (ii) the promoter violates any terms of the approvals granted for the project; and (iii) the promoter is involved in any kind of unfair practice of irregularities.
In the event the registration is revoked by the Regulatory Authority or it lapses, the Regulatory Authority shall:
debar the promoter from accessing the website in relation to the project, specify his name in the list of defaulters on its website and also inform other Regulatory Authorities in other States and Union territories about such cancellation;
facilitate the remaining development works to be carried out by competent authority or the association of allottees or in any other manner as may be determined by the Regulatory Authority. However, the association of allottees shall have a first right of refusal for carrying out the remaining development works; or
direct the scheduled bank holding the project bank account, to freeze the account and thereafter take such further necessary actions, including consequent de-freezing of the account, for facilitating the remaining development works in the manner mentioned above.
Website of the Regulatory Authority
The promoter shall, upon receiving his login Id and password, create his web page on the website of the Regulatory Authority and enter all details of the proposed project including:
details of the registration granted by the Regulatory Authority;
quarterly up-to-date list of the number and types of apartments or plots or garages, as the case may be, booked;
quarterly up-to-date status of the project along with the list of approvals obtained and approvals pending subsequent to commencement certificate; and
such other information and documents as may be specified by the regulations made by the Regulatory Authority.
Advertisement or prospectus issued by the promoter
The advertisement or prospectus issued or published by the promoter should prominently mention the website address of the Regulatory Authority, where all details of the registered project have been entered and include the registration number obtained from the Regulatory Authority and other similar details.
Where any person makes an advance or a deposit on the basis of the information contained in the notice, advertisement or prospectus and sustains any loss or damage because of any incorrect, false statement included in these, he shall be compensated by the promoter in the manner as provided under the Act. Also, if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, intends to withdraw from the proposed project, his entire investment (along with interest at such rate as may be prescribed and compensation in the manner provided under the Act), will be returned to him.
Limit on receipt of advance payment
A promoter shall not accept a sum more than 10% percent of the cost of the apartment, plot, or building, as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement of sale with such person and register the said agreement of sale, under any law for the time being in force.
Restriction on addition and alteration in the plans
The promoter cannot make any addition or alteration in the approved and sanctioned plans, structural designs, specifications and amenities of the apartment, plot or building without the previous consent of the allottee.
The promoter also cannot make any other addition or alteration in the approved and sanctioned plans, structural designs and specifications of the building and common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such a building.
In case any structural defect or any other defect in the workmanship, quality or provision of services or any other obligations of the promoters is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, the promoter shall rectify such defect without any further charge, within thirty days. If the promoter fails to rectify such defect within such time, the aggrieved allottee shall be entitled to receive appropriate compensation in the manner as provided in the Act.
Restriction on transfer and assignment
The promoter shall not transfer or assign his majority rights and liabilities in respect of a project to a third party without obtaining prior written consent from two-thirds of the allottees, except the promoter, and without the prior written approval of the Regulatory Authority.
Please note that the allottee, irrespective of (i) the number of apartments or plots booked by him or booked in the name of his family; or (ii) in the case of other persons such as companies/firms/any association of individuals, by whatever name called, booked in its name or booked in the name of its associated entities/related enterprises, shall be considered as one allottee only.
Refund of amount in case of delay in handing over possession
In case the promoter is unable to hand over possession of the apartment, plot or building to the allottee (i) in accordance with the terms of the agreement of sale; or (ii) due to discontinuance of his business as a promoter on account of suspension; or (iii) revocation of his registration or for any other reason, then the promoter shall be liable, on demand being made by the allottee, to return the amount received by him from the allottee with interest and compensation at the rate and manner as provided under the Act. This relief will be available without prejudice to any other remedy available to the allottee.
However, where an allottee does not intend to withdraw from the project, he shall be paid interest by the promoter for every month of delay, till the handing over of the possession, at a prescribed rate.
Other Relevant Provisions
The same rate of interest will be payable by the allottee and the promoter in the event of their respective defaults.
In the absence of any local laws, an association or society or cooperative society, as the case may be, of the allottees, shall be formed within a period of three months of the majority of allottees who have booked their plot or apartment or building, as the case may be, in the project.
After the promoter executes an agreement for sale for any apartment, plot or building, no mortgage or charge can be created by the promoter on such apartment, plot or building. If any such mortgage or charge is created, then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken or agreed to take such apartment, plot or building.
The promoter may cancel the allotment only in terms of the agreement for sale. However, the allottee may approach the Regulatory Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, is unilateral and without any sufficient cause.
The promoter shall obtain insurance as may be notified by the appropriate Government, including but not limited to the title of the land and building and construction of the project. The promoter shall also be liable to pay the premium and charges in respect of the insurance.
The promoter shall execute a registered conveyance deed in favour of the (i) allottee in respect of the apartment, plot or building; and (ii) association of allottees of competent authority in respect of the undivided proportionate title in the common areas, and hand over possession of the same within the period as specified under the local laws. In the absence of any local law, such conveyance deed shall be carried out by the promoter within three months from date of issue of the occupancy certificate.
The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land in the manner as provided under the Act, and such claim for compensation shall not be barred by limitation provided under any law for the time being in force.
Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or buildings.
The Regulatory Authority shall make a recommendation to the appropriate Government on (i) creation of a single window system for ensuring time-bound project approvals and clearances for timely completion of the project; and (ii) creation of a transparent and robust grievance redressal mechanism against acts of omission and commission of competent authorities and their officials.
Real Estate Appellate Tribunal
In addition to the establishment of the Regulatory Authority, the Bill also proposes to establish a Real Estate Appellate Tribunal (Appellate Tribunal) within one year from the date of commencement of the Act.
Any person aggrieved by any direction or decision made by the Regulatory Authority or by an adjudicating officer, may make an appeal before the Appellate Tribunal within a period of 60 days from the date of receipt of a copy of the order or direction.
The Appellate Tribunal shall deal with the appeal as expeditiously as possible and endeavour shall me made to dispose of the appeal within a period of sixty days from the date of receipt of appeal.
The Appellate Tribunal shall have same powers as a civil court and shall be deemed to be a civil court. An appeal against the order of the Appellate Tribunal may be filed before the jurisdictional High Court within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal.
For adjudging the compensation to be paid by the promoter in accordance with the provisions of the Act, the Regulatory Authority shall appoint (in consultation with the appropriate Government) one or more judicial officers as deemed necessary, who is or has been a District Judge, to be an adjudicating officer for holding an inquiry in this regard. However, such an appointment will be made after giving any person concerned a reasonable opportunity of being heard.
Offences and Penalty
Stringent penal provisions have been prescribed under the Act against the promoter in case of any contravention or non-compliance of the provisions of the Act or the orders, decisions or directions of the Regulatory Authority or the Appellate Tribunal which are the following:
If promoter does not register its project with the Regulatory Authority – the penalty may be up to 10% of the estimated cost of the project as determined by the Regulatory Authority;
If promoter does not comply with the aforesaid order of the Regulatory Authority – imprisonment of up to three years and a further penalty of up to 10% of the estimated cost, or both; and
In case the promoter provides any false information while making an application to the Regulatory Authority or contravenes any other provision of the Act – the penalty may be up to 5% of the estimated cost of the project or construction.
These penal provisions have also been prescribed for any contravention or violation committed by the real estate agent or the allottee.
If any allottee fails to comply with, or contravenes any of the orders, decisions or directions of the Regularity Authority, there may be a penalty for the period during which such default continues, which may cumulatively extend up to 5% of the cost of the plot, apartment or building, as the case may be, as determined by the Regulatory Authority. Further, if any allottee fails to comply with, or contravenes any of the orders or directions of the Appellate Tribunal, this may entail imprisonment up to one year or with fine for every day during which such default continues, which may cumulatively extend up to 10% of the cost of the plot, apartment or building, as the case may be, or with both.
The provisions of this Act shall have an overriding effect in case there is any inconsistency between the provisions contained in this Act and in any other law (including a state law) for the time being in force.
The Maharashtra Housing (Regulation and Development) Act 2012 has been repealed by the Central Government.
In essence, the Real estate Bill intends to increase transparency and accountability in the real estate sector, by providing mechanisms to facilitate and regulate the sale and purchase of commercial and residential units/projects and timely completion of projects by the promoters.
Real estate bill to be implemented from May 1st 2017.
Now, the challenge before the Government is to keep a check how efficiently it is functioning.
A very interesting concept – You get assured rent for fixed years once you invest in such property. Let’s dive in to the topic.
Puravankara’s Provident Housing came up with an innovative method to grow their business and give value to our investment.
Managed Residences Investment Plan (MRIP)
Puravankara, one of the top most real estate developers in India, believes in “We cannot really depend on our job alone if we want to achieve financial freedom. Creating and having multiple source of income is one of the best ways to step up the ladder and achieve our financial goals”.
Hence, came up with the solution, buy the ready-to-move in apartment with assured rent for seven years along with appreciation in rent.
Here are some quick points for more information.
An innovative, low risk real estate investment to help you build a long term rental income.
Investment structure – Buy & Sale back with a contracted lease term of 7 years.
Puravankara’s MRIP offer provides long term lease management services from JLL, the leading international property consultant.
Multi-city residential assets across Chennai, Bangalore, Coimbatore & Kochi.
Investments across 3 Price buckets – approx. 35 to 55 lakhs ; 75 to 125 lakhs & 2.5 to 4 cr.
Benefit from committed monthly rentals with annual rent escalations, long term capital appreciation, zero maintenance & hassle free process.
All apartments offered under Puravankara’s MRIP offer are ready to move in apartments and are completed apartments/ completed projects.
Pros and Cons of Puravankara’s MRIP Offer :
As the company believes, it is always better to have multiple investments and multiple sources of income. And hence, this is a best source of second income.
Buying a home for rental purpose is a very common practice in India. Finding a tenant and getting assured income is most challenging. This offer encourages a hassle-free maintenance process for seven years by not only paying the rent but also maintenance charges.
You just have to pay the property tax every year.
Be careful while buying as the price under Puravankara’s MRIP offer is slightly higher than the price for the units with no offer.
But if you are an NRI or retired employee or low risk taker, it is always best to invest.
Go for Purvankara’s MRIP Offer, only if you can self-invest. Since, under this offer, the pricing of the unit is relatively higher, it doesn’t make the best option if you have to pay more interest to banks under home loan.
How Loanyantra Works :
Investing in a property is no small issue. And we understand it. So your search for home ends here. Think home loan and think loanyantra.
As we discussed above about managing homes, we, in loanyantra, manage your home loan. Call us for further queries about free services on home loan management.
Today almost no loan or credit card application gets approved without checking the applicant’s CIBIL report and CIBIL TransUnion Score. Ever wondered how a person’s credit score is calculated?
Here’s a quick glimpse into what goes into the making of a person’s CIBIL TransUnion Score:
What is a CIBIL TransUnion score?
CIBIL calculates an individual’s credit score through advanced analytics and assigns a number between 300 and 900 to a borrower, based on his/her credit history. The closer your score to 900, the more confidence the credit institution will have in your ability to repay the loan and hence, the better the chances of your application getting approved. While each bank will have its own credit scoring cut-off based on the credit sanctioning policies, it has been observed that most banks are lending to consumers with a CIBIL TransUnion Score of 750 and above.
How is the score calculated?
While each credit information company has its own proprietary algorithm to calculate an individual’s credit score, the most important elements of the score composition are centric around the loan payment behavior of the individual. Your CIBIL TransUnion Score is calculated based on the information in the “Accounts” and “Enquiry” section of your CIBIL Report. The score is calculated based on the following factors:
Credit Utilization: How much credit is the consumer using?
Defaulting/Delinquency: How many accounts are past due and by how many days?
Trade Attributes: How old are this consumer’s lines of credit? What type of credit does he have? Does the consumer have a good mix or balance of credit or is it all credit cards?
Here is a breakup of the various factors that impact the CIBIL Transunion Score:
1. Past Performance: Individuals past performance on their debt obligations is the most important criterion and contributes approximately 30 per cent weightage to the score.
2. Credit Type & Duration: Type of loan availed whether secured or unsecured loan, and the duration of credit history established contributes an additional 25 per cent to the score.
3. Credit Exposure: The total amount of credit exposure contributes another 25 per cent
4. Other factors: Other factors such as credit utilization, recent credit behavior contribute the remaining 20 per cent to the score.
Your CIBIL Report and CIBIL TransUnion Score not only determine whether or not you qualify for a loan, but it may also have an impact on the terms and conditions on which you can avail the loan. The higher the credit score, the better your chances of availing the loan faster and on favorable terms. It is advisable to check your CIBIL Report and CIBIL TransUnion Score before applying for a loan. Timely payments of loan EMIs is most important for maintaining a good credit history and a healthy credit score.
Your Home Loan EMI starts from the time the Bank has created a disbursement cheque. Some banks start your EMI from the date you picked the first disbursment cheque even before you have
First EMI is called broken period EMI. Which is lesser than your EMI.
What is Broken period EMI?
When you opt for EMI payment, say 5th of every month. Now suppose your disbursment cheque is handed over on 25th of the month. Then Bank would calculate interest for 25th till 5th of next month.. say for 10 days and it would take it on 5th. The next EMI will be as per your EMI schedule.
Again you can go for Pre-EMI or Full EMI. I would suggest if you are capable of paying full EMI then start with Full EMI. Most of the times Banks will keep it to Pre-EMI for under construction properties. Which will not decrease your loan tenure.
Plan your loan well, then only you will close it faster and home will be fully yours.
It is common that you hand over your original property documents to the lender either a bank or NBFC, when you take a loan. The lenders are usually careful in handling the customers’ documents but, there are cases where the banks can misplace the documents due to some unconscious situations. You or the lender knows it only when you go to collect the original documents during a loan closure.
What are the documents the lenders have with them.
The most important original documents about the property are with the lender.
Katha (Extract and Certificate)
E C till date
Approved building plan/Layout approved plan
Why do the lenders need to put the original property documents with them?
Trusting the home the bank lends in order to fulfill your dream. To avoid the chances of unavoidable situations like customer not repaying the loan under any situation, the bank keeps the originals with them. So, literally, your home becomes yours, only after you repay the total loan amount.
How can the loss of original documents happen?
After the documents are received by the customer, the bank files it and stores it in a locker making it utmost confidential. But at times the loss of original property documents can happen due to different reasons.
When you avail a home loan, all the original documents of the property pass through multiple hands before being dispatched to the central repository. For most of the banks central repository is in Mumbai. If you request for xerox of the documents during the tenure of the loan, then the documents will be pulled out from the repository and after taking a xerox, these are again kept in the locker of central repository. These central repositories are normally maintained by a third party. After the loan is closed, the original documents go through the same cycle before being handed over to the owner. There is always a possibility that the loss of original property documents can happen during this process.
Also if the premises is shifted to a new building, then the original property documents can be misplaced while transferring.
What you should do when there is loss of original property documents by the lender?
If there is a loss of original property documents by the lender, it is their sole liability to obtain authentic duplicates or a certified copy of the same. An FIR needs to be filed by the lender, and the entire process and all costs are to be borne by the lender.
To understand clearly, let’s go through a case study on loss of original property documents.
Case Name : Secretary/Manager, Mayyanad Regional Co-Operative Bank V/S Ebrahimkutty
Appeal Number : First Appeal No. 288 of 2014.
Date of Judgement/Order : 20/02/2017
Courts : National Consumer Disputes Redressal Commission (NCDRC)
Facts of the Case:
Ebrahimkutty had taken a loan from Regional Co-operative Bank against mortgage of his property in a village of Kerala by depositing the original title deed. On repayment of the loan in 1999, the bank failed to return the deed.
The bank later verbally informed him that the original deed could not be found and attempts were being made to trace it. The bank advanced further loans to him against the same title deed. These loans too were repaid in due course.
The last loan was finally closed on September 8, 2012, but the bank still could not find the title deed.
The bank then informed him that the original deed was misplaced while shifted its building premises.
Aggrieved, he filed a complaint before the Kerala State Commission. He claimed that his property was worth Rs 75 lakhs, but he could not sell it as the bank had lost the original document. He sought a compensation of Rs 25 lakhs.
The state commission directed the bank to return the original deed and also pay compensation of Rs 10 lakhs within one month, or along with 12% interest, if delayed. In case of failure, to return the title deed the bank was ordered to issue a written certificate about the loss.
The bank appealed against this order. It contended that the loss of the deed was communicated way back in 1999, but the complaint was filed 12 years later, so it ought to have been dismissed.
It also argued that complainant had not been able to show that he had suffered any damage due to the loss of the title deed. Complainant argued that the bank had merely admitted that the deed had been misplaced, but had never admitted that it had been lost.
Issue: Whether Bank would be liable to pay for loss of documents taken against loan?
Document lost cannot be recovered: The National Commission observed that if a document is misplaced, there is a possibility that it could be recovered at a later stage. If it is lost, the question of recovery does not arise.
False assurance wont effect Period of Limitation :The Commission noted that even in the affidavit filed by the bank, it had denied that the original title deed was lost, and had asserted that an assurance had been given that it would be returned as soon as it was traced. So the Commission held the complaint to be within limitation.
Loss of Deed would effect value of property:The Commission also observed that the loss of the title deed would affect the value of the property, so complainant would be entitled to be compensated.
Deficiency of Service:The National Commission held the bank guilty of deficiency in service and ordered the payment of compensation amounting to Rs.5 lakhs along with 12% interest for the period of delay
Never neglect the loss as it might decrease the value of the property. It is always better to have a written note by the lender about the loss. Once you get the note, preserve it as that is the only document you have for your property.
1. 30 % of your income must be used for monthly living expenses.
2. 30% of your income must be used for liabilities repayments, if any..
3. 30% of your income must be SAVED and INVESTED for your future LIVING.
4. 10% of your income must be spared for entertainments, vacations
5. 6 months expenses must be available for emergency fund (should be invested in LIQUID FUND, FD Etc)
6. Home loan must be registered and applied on both husband and wife name. (Both can get benefits on Home loan Tax benefits)
7. Buying second house for investment is not advisable ( Survey reports – it will fetch you only around 3% return)
8. After 45 years of age, not supposed to enter into any BIG LIABILITIES (Higher education of children and wedding of children will happen around 45 to 50 only, so plan now for the same.)
9. Have joint account @ Bank savings account.
10. Property must be registered on both Husband and wife name. (As per legal act – after husband first legal heir is wife, after wife it goes to children).
11. Regular check on Nominations at all financial instruments. if not nominated, do it now..
12. Only in insurance policy, claims payable to Nominee. In other financial instruments legal heirs certificate is must to get back the settlement
13. Must have Term Insurance to financially secure future of your dependants..
14. Don’t take any financial investment decisions EMOTIONALLY, and also Avoid last minute tax saving investment decisions, plan well in advance.
15. MEDICLAIM is must (in spite of Group mediclaim coverage given at office) (After retirement there is no mediclaim coverage, after 50-55 years of age, it’s very tough and costly to enter into mediclaim)
16. For your jewelry LOCKER, Only one lakh is payable by bank, if theft or fire happen at bank. Provided insurance done.
17. Like same way Government guaranteed only one lakh for your FD also. (Fixed deposits with Banks upto Rs. 1 lakh only are backed by deposit insurance)
18. Know all Tax implications. You cannot avoid paying tax. But you can minimize by way of tax planning and investments..
19. All financial documents must be kept safely and keep family members informed of the same.
20. Financial investments must be followed through personal financial planning adviser.
21. Review your portfolio for every six months.
These are general suggestions, but personal financial planning and investment decisions depend upon case to case.
Have a Healthy and Wealthy Financial Year 2017-2018…..
Interest Rate = Margin Rate + MCLR Rate for specific period or Base Rate
When you avail a loan for 8.50% that would be broken up into
8.50 % = 0.50%(Margin) + 8.00% (1-Year MCLR)
Its confusing right.
When ever you take a loan either Fixed or Floating the margin on that day gets fixed.
In case you loan is floating, then the floating will depend on the MCLR Rate for the specific period. Normally most of the banks give you for 1-year. Meaning every 1-year your rate would change as per that days MCLR for that period.
Say after year 1-year MCLR is 9.75% then your interest rate would be 10.25%.
Last but not the least the Property you are buying & Own contribution to pay 20% of the property
Location , approvals of the property.
Your Salary : You should be earning enough to pay the 80 lac EMI.
Your Age : Based on your age, maximum Loan tenure will be decided. Before you retire i.e 58 years you should be clearing the loan.
Existing Loans : If you have any exiting Loans, you will be paying EMI so you overall eligibility would come down for the next loan.
Credit Score : Banks/NBFC would look at your credit report and based on how you have paid will decide to go if they want to give you loan
Property : When you are asking for Rs 80 lac loan, it would mean at least the property should be Rs 1 crore. Technically the price of the property should support it and you have to pay 20% from your self funding and 80% you can take loan. It should not be like for Rs 10 Lac property you are paying Rs 1 Crore.
Approvals of the property : Based on the Location and type of approvals and amount of deviation while constructing banks would take a call if they will be giving loan or not.
So based on the property you have selected and based on your financial profile you need to select the bank and the loan product. Some not so famous banks will have better products for certain properties.
Plan your loan well, so that you will close faster and home will be fully yours.