To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A will appear every other Monday.
My wife and I are buying an existing two-bedroom, hall, kitchen (resale) flat for Rs45 lakh. We have an approved loan of Rs40 lakh; Rs5 lakh would be our contribution. The seller has an outstanding loan of Rs19 lakh against this flat. We want to take a loan from another lender to purchase this flat. Will our bank be able to take over this loan from the previous lender or will the seller have to fully repay his loan and only then transfer the flat in our name?
Your lender could take over the seller’s outstanding home loan by issuing a cheque of Rs19 lakh in favour of the previous lender, who will then release the original documents to your lender, once you give your own contribution of Rs5 lakh. Your lender will issue another cheque for the balance Rs21 lakh in the seller’s name.
In all, then, there would be three transactions:
1. Rs5 lakh, from you to the seller;
2. Rs19 lakh, from your lender to the seller’s lender;
3. Rs21 lakh, from your lender to the seller.
I bought a resale flat seven years ago and have repaid my loan. Now I want to add a room. Will I get a loan? If yes, must I mortgage the property again?
Yes, several banks and home financing institutions provide home extension loans specifically to facilitate the extension of an existing dwelling unit to meet the needs of a growing family, provided you have adequate FSI to construct it. This loan is available for adding space to your home —be it an additional room, a larger bathroom, etc.
Customers could avail up to 85% of the cost of extension by mortgaging the entire property and/or other security as may be required by the lender. The loan eligibility will, however, depend on the repayment capacity of the borrower.
A home extension loan can also fetch you the same tax benefits as a home loan. Under section 80C, you can avail tax deduction up to Rs1 lakh per annum on the principal amount repaid and under section 24, you would be entitled for a deduction of up to Rs1.5 lakh per annum on the interest paid.
Renu Sud Karnad is joint managing director, HDFC. Readers may write in with their queries and comments to firstname.lastname@example.org