Q1. What do you mean by a Home Loan?

Ans- Borrowing money from a bank, housing financing institution at a certain interest for the purpose of construction, buying or to upgrade a residential property is what is meant by a home loan.

Q2. What do you mean by tenure of a home loan?

Ans- Considering the sum availed the tenure may differ and generally have about 5 to 30 years repayment time. It is the time you get for the repayment of the loan amount.

Q3. How can tenure affect the loan?

Ans- As the tenure of the loan is longer the more interest you will have to pay. The EMI in the longer tenure will be less comparatively to a shorter one but will accumulate a greater interest that you’ll have to pay.

Q4. What is meant by an EMI?

Ans- EMI means Equated Monthly Instalment and is a sum of fixed amounts that you have to pay to the bank at a particular date every month. EMI is fixed when you avail yourself of the loan and covers the interest and principal amount you will pay monthly.

Q5. What is meant by fixed and floating rate of interest?

Ans- A fixed rate of interest is which will not fluctuate whatever there are changes in the market while a floating rate of interest may change according to the rise and fall in market prices.

Q6. What is a Down Payment?

Ans- Usually the bank lends around 75 to 85 percent of the cost and you have to make an upfront payment of 20 to 25 percent. That is the down payment you make at the beginning when you take out a loan.

Q7. What is meant by property registration?

Ans- Property registration is the registration of the documents related to the transfer of ownership, lease or sale of an immovable property. Section 17 of The Indian Registrations Act, 1908 makes registration of all properties compulsory. After a property is lawfully registered, the owner of that property is responsible for all aspects concerning the property.

Q8. How do I register my property?

Ans- While registering a property you will be required to pay registering charges for the sale deed. Necessary stamping will be done on the papers at the registrar’s office of the concerned jurisdiction under which the area falls. Some cases may also involve transfer deeds. The registration process is now becoming computerized in most of the Indian States.

Q9. What is meant by Power of Attorney?

Ans- By giving a power of attorney to a person you authorize that person to take decisions on your behalf regarding your property, assets and finances. Usually there are two types of power attorneys. One is the General power of attorney and the other is the Special power of attorney.

Q10. How many properties can a single person own?

Ans- One can have as many properties one wishes to own, there are no such restrictions.

Q11. Which are the various taxes I’ll have to pay before buying a property?

Ans- TDS, that means tax deduction at source on amounts that exceed fifty lakhs of rupees while buying a property and this excludes agricultural land.

Stamp Duty

Service tax, when you buy a property through a builder who constructed and conceived the real estate project before it was offered for possession to the buyer. In a ready to move property service tax is not applicable.

VAT, It differs from state to state. If it’s applicable in your state you will have to pay it.

Q12. What is meant by stamp duty? Who has to pay the stamp duty and can I get tax benefits on the same?

Ans- The tax paid for the recognition of a property in legal terms is called the stamp duty. It’s paid by the person who is buying the home. You can claim a tax incentive of Rs. 1.5 Lakh on the stamp duty and registration fees while you buy a new property or when you are constructing your home. These benefits are only available for a single property that you own.

Q13. What is meant by Capital gains on a property purchase?

Ans- A property is considered as a capital asset. On the sale of the property Capital Gains tax is what is levied on the profit that is gained after selling the property.  These gains are calculated after considering the transfer and renovation charges as well as the current rate of inflation.