The basics are informative about terms. Pl give detailed analysis of the home loan terms,whether floating rate or fixed rate of interest is benefical looking to the incometax purpose, how the home loan and its part are beneficial for tax payers and which company to go with HDFC,icici LIC etc and ratings.
RE:Home loan terms
by Ravish Sheth on Dec 21, 2006 08:24 PM Permalink
You do get tax benifit on pre-EMIs (interest paid before completion of building). But actually not before your house is completely done. You can claim tax exemption in 5 equal proportion of our pre EMI paid. And you can start claiming that from the financial year your house was ready.
RE:Home loan terms
by SRG on Dec 15, 2006 10:26 AM Permalink
Hi,
Thank you for the feed back. Some more information:
* You are liable to pay interest from the day 1 you take loan from the bank; * All the nationalized banks charge interest on daily reducing balance; and interest is applied on monthly basis; That is not so in case of private banks and varies from bank to bank and for different types of loans; * Pre -EMI - interest you have to service before you begin your EMIs; If the disbursement is in stages you pay interest only for amount so far disbursed; * I repeat - There is no tax benefit for the house is under construction;
Appraisal:
Though norms differ from bank to bank, normally, banks would be willing to sanction you such amount, where your gross out go would be up to say 50 to 60% of your gross salary.
Gross out go = EMI on home loan + PF deduction + tax + EMI on car loan (if any)+ EMI on personal loan (if any) + any other regular deduction that would be obvious on perusal of your salary account statement
EMI per 1 lakh ~ Rs 1000
You can do a rough calculation of amount for which you would be eligible
Imp: It is better to talk to employee of the respective banks than agents; Employees are liable;
