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Home loans: All that you wanted to ask — rules and rates

Check if your bank has any restrictions on pre-payments

Is there annual limit on the amount of prepayment on a housing loan?
SP Singh
Usually, there is no limit on prepayment amount. However, some banks have particular restrictions where it has clauses in the arrangement letter.

I plan to buy a new property by taking home loan of `40 lakh. Property value is `80 lakh and remaining amount will be paid by my father by selling his current property. New property will be in my father s name (as co-owner) and mine . Can I take PMAY subsidy as home loan will be only in my name?
Mridul Singh
If you add your father as co-owner, then you will not be eligible for PMAY, as one of the criterion is that the family should not own a pucca house. Only if you show yourself as a separate family unit, you may avail the PMAY.

I took a housing loan 10 years ago. As the bank is not reducing the interest rate, should I transfer the loan to another bank?
Y S Pulkit
If you can see that with the reduction in interest rates by RBI, there is no reduction in interest rate for you, you may approach another bank. However, be aware of the paperwork involved as well as the charges.

My bank refuses to disburse the housing loan unless I take an insurance cover from them. Is it mandatory?
S Chandrasekhar
The natural disaster and fire cover for property is mandatory. But life cover of borrower is not mandatory. You may take up the matter with the bank. They cannot refuse disbursal if you don t want life cover.

My father has a plot of land. My brother and I want to take a loan jointly. Will a bank give us loan?
Yes, surely the loan may be availed by your brother and father provided they have proof of income. The eligibility will be governed by their income and capped by a percentage of the cost, whichever is lower.

I had taken a loan of `3 lakh to buy a car six months ago. Now, I have got some money after selling ancestral property. Can I use that money to repay the loan?
P D Kumar
Yes, funds may be used to pay off the car loan.

The writer is founder, AZUKE Personal Finance Advisory (Website: Send your queries to