The bank will do a thorough check on your past and present financial obligations that will include your other loans. Some of the parameters the bank checks are whether you have been a prudent borrower and that all your dues have been paid on time. They also check your credit card statements to see whether you pay your dues on time or you habitually exceed limits. This is to check on your willingness to repay the loan. Most banks have access to your past credit information through your credit report maintained by credit bureaus.

Do remember, that banks will not lend you the full value of the property. You can get only a certain percentage of the value of the property (40% to 60%) or between two and two-and-a-half times your current income, whichever is lower.

You pay interest only on the money you withdraw from the overdraft account to the extent you do not repay. You can keep withdrawing and repaying money as and when you like and incur interest expenditure only on the net outstanding amount from time to time. You pay money on the reducing balance of loan amount outstanding as per the contract

The monthly loan amount from mortgaging the house also depends on the borrowes age; higher the age, higher the monthly loan amount. Now, if Menon opts for a reverse mortgage, he and his wife will get regular monthly loan payouts for a period of 15 years, usually the maximum tenure offered by a bank. The couple can continue to stay in the house during their lifetime.

Yes, says NHB, but there are certain conditions. If the borrower wishes to will the mortgaged property to any of his/her relatives, it should be subject to the discharge of the mortgage debt by the inheritor and a statement that the heirs shall not be entitled to challenge the validity of the mortgage.

The cost of the plot to you or the current market value, whichever is lower, will also be taken into account to work out the total cost of the project. The bank will decide the home loan amount based on this total cost. The loan will be released in parts, based on the progress of the construction, and after you have brought in your full margin. The bank may insist on sending its own technical personnel to assess the progress of construction or may rely on certificates/photographs submitted by you. Some banks are not comfortable funding self-constructed properties and hence, you will need to take that into account while finalising your lender.

This is possible if your monthly income is above Rs 10,000, or if you are a practising professional. But personal loans being expensive and for a short tenure, are likely to drain your monthly resources. Take this option only when you have resources to pay off the personal loan from sources other than those taken into account for your home loan.

This power of attorney would also give the power to the buyer to further provide such power of attorneys to other people (for other buyers in the future). Most banks do not encourage such transactions, since the ownership is itself suspect in such a transaction. Such transactions are normally entered into to save on charges payable to the development authorities as well as stamp duty and registration charges. Home loans to buy such properties may be available from a restricted list of home loan lenders, who may also lend at higher interest rates.

In actual practice, however, it is difficult to estimate the monthly expenses of each borrower separately. Which is why banks use a pre-determined percentage of your income as being available for paying the loan installment, based on their past experience as well as available household expenditure data. For instance, a bank may assume that if your income is Rs 20,000 per month, 40 per cent of that (i.e. Rs 8000) will be available for repayment. Then, they calculate the loan eligibility accordingly.

Some banks allow parents and children to be joint borrowers, while a smaller number of banks allow brothers to be joint borrowers. The reason for the restrictions is that in the event of some dispute arising between the joint borrowers, the income stops getting pooled and there may be a problem in paying the loan installments.