This document discusses housing finance and home loans. It covers the basics of home loans including the different types of loans, features, and application process. It also discusses interest rates, explaining the difference between fixed and floating rates. Finally, it provides an overview of the approval process for construction projects seeking an approval from a financial institution under the APF process, outlining the required documents.

1. Housing Finance
Presented By
Rahul Patil

2. Agenda
1. Basics of Home Loan
a) Types of Home Loan
b) Some salient features of home loans
c) Home Loan Process
– Sanction
– Disbursement
2. Interest Rate
a) Principle
b) Interest

3. Part 1
Basics of Home Loan
a) Types of Home Loan
b) Some salient features of home loans
c) Home Loan Process
– Sanction
– Disbursement

4. What is a Home Loan?
• A home loan is a loan taken for buying or constructing a home
or to make improvements to a residential property. You can
get a loan from banks and registered housing finance
companies
• Your home loan is secured against the property that you buy.
This means that in case you are unable to repay the loan, the
lending bank will have the right to take possession of your
home

5. Home Loan Types
• Basic home loan
1. For new properties
2. Resale
3. Resale- Re-finance
4. Balance Transfer (BT)
5. Loan against property (LAP)
6. Commercial loan

6. Some Salient Features Of Home Loans
• Loans are available for salaried, self employed and Non
Resident Indians (NRIs)
• Loans are available for builder flats, under construction
properties, and residential plot with construction due to start
• Flexible repayment options, ranging from 12 months – 300
months (1 year – 25 years)
• Repayment with easy Equated Monthly Installments (EMI)
• Loan transfer facility in case you want to change your lender
• Pre-payment facility in case you want to pay back more of
your loan

7. Home Loan Process
SANCTION
1. Collection of documents
2. File checking and Inward
3. Loan A/C No generation
(CIBIL)
4. Verification (Office and
Residence)
5. Sanction: System
generated SMS & e-mail
6. Sanction Letter
DISBURSEMENT
Original Property docs
1. Technical site visit
2. Disbursement Date Fix
3. Disbursement

8. Part 2
Interest Rate
• Principle
• Interest

9. Interest Rate
1. Principal amount:
This is the total loan amount that the lender gives you
2. Interest rate:
This is the cost of the loan that you pay to the lender
The amount of the loan, i.e. the principal, that you can avail of
is decided by the lender based on:
– Your income
– Your loan repayment capacity
– The house (property) you wish to purchase

10. Interest Rate
As a borrower, you can choose the type of interest rate that
you will pay. You can either pay:
– Fixed rate: Where the interest rate remains fixed during
the life of the loan
– Floating rate: Where the interest rate floats or changes
depending upon market interest rates

11. Rate of Interest Factors
• Fixed rate: A loan in which the interest rate does not change
during the entire term of the loan. opposite of adjustable rate
• Floating rate: Any interest rate that changes on periodic basis.
The change is usually tied to movement of an outside
indicator, such as the prime interest rate

12. Rate of Interest Factors
– Prime Lending Rate (PLR) or Retail Prime Lending Rate (RPLR)
Both, PLR and RPLR, are the same. PLR is a bank's benchmark interest rate.
Based on this rate, banks fix rates on various loan products. For instance,
let's assume a bank fixes its home loan floating rate at 0.5 per cent above
its PLR. So, if the PLR of the bank is, say, 10 per cent, then the floating rate
on its home loan will be 10.5 per cent.
• Rate is depend on RPLR - (spread) = rate`
16.50% - 6.00% = 10.50% (Floating)
NOTE : Spread is applicable @ the time of disb & it is fix for entire tenure.
• In future if RPLR goes up or down u will get effect on rate of interest
• For example RPLR - 15.50% -6.00% =9.50%
• For example RPLR - 13.00% -6.00% = 7.00%

13. Summary
• Basics of Home Loans
• Interest Rates
• Process of Home Loans

14. Short Break

15. Session 4
By
Mr. Rahul Patil

16. Agenda
• Session 1
– Home Loan Transaction Cycle
– Enquiry
– Call
– Fix Meeting
– Home Loan Requirement
– Queries Solution
• Session 2
– Sanction Eligibility
• Session 3
– Disbursement Eligibility

17. 1. Home Loan Transaction Cycle
• Enquiry
• Call
• Fix Meeting
• Home Loan Requirement
• Queries Solution

18. 2. Sanction Eligibility
It depends on monthly income.
Formula:
Loan Amount =Monthly Fixed Income*50% / Per Lac EMI
Sanction Eligibility
Ratio divided into 2 Parts
• IIR
• FOIR

19. What is Installment to Income Ratio (IIR)?
Installment to Income Ratio is also used by the lender. It is used
to generally used by the banks or the lender companies to
evaluate the eligibility of the borrower. It is very similar to FOIR.
But it is presented in the form of percentage. Under IIR, there is
a percentage of installments of home loan paid each month. This
is normally near about 50%.
IIR Formula = Monthly EMI / Gross Salary

20. What is Fixed Obligation to Income Ratio
(FOIR)?
• It is type of ratio which is done through bank or company
providing loans. Through FOIR, they lender tries to evaluate
the eligibility of the borrower. This ratio refers the EMI to be
paid by every month by the borrower. PF, profession tax, LIC
premium, Recurring Deposit scheme, charity to a trust etc. are
not included in it in the form of default EMI (Fixed Obligation).
FOIR Formula= Present EMI + All EMI /Gross Salary

21. 3. Disbursement Eligibility
• Financial Institute disburse the amount against 80% of Cost of
Property.
Cost of Property =
Agreement Cost (Area x Rate) + SD + REG + MSEB +
PARKING + STAX + VAT

22. Summary
1. Home Loan Transaction Cycle.
-Enquiry
-Call
-Fix Meeting
-Home Loan Requirement
-Queries Solution
2. Sanction Eligibility
3. Disbursement Eligibility

23. Session 5
By
Mr. Rahul Patil

24. APF Process
LIST OF DOCUMENTS REQUIRED FOR APF
1. Partnership Deed/Memorandum of Articles of Association.
2. Copy of approved plan (Approved layout and building plans).
3. Copy of the agreement between land owner/s and the developers.
4. Copy of the Power of Attorney.
5. Latest Property Card Extract / 7/12 Extract.
6. Latest Title verification Report and a detailed search report.
7. Draft copy of Agreement for sale.
8. Brochures on the project, if any.
9. Copy of the NA permission and receipt for the N.A Taxes paid.
10. Legal details duly filled

25. APF Process
11 Copy of U.L.C Permission.
12 Copy of the Commencement Certificate.
13 Copy of plinth checking certificate.
14 List of bookings with contact telephone numbers.
15 Affidavit from developers as per enclosed draft.
16 Any other relevant documents.
17 Cost sheet
Details of payments to Land Owner
Profile/ Background of the developer
Details of Bank Account of project.

26. Summary
• Basics of Home Loans.
• Interest Rates
• Process of Home Loans
• Tax Benefits
• APF