Ask Mint | Even a non-working homeowner needs to be co-applicant in loan

Ask Mint | Even a non-working homeowner needs to be co-applicant in loan
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First Published: Mon, May 31 2010. 09 38 PM IST

Renu Sud Karnad, Managing director, HDFC Ltd
Renu Sud Karnad, Managing director, HDFC Ltd
Updated: Mon, May 31 2010. 09 38 PM IST
Renu Sud Karnad, Managing director, HDFC Ltd
I have started earning recently and I want to take a home loan and construct another floor on my father’s house. However, I don’t want to transfer the ownership from my father to myself. Will I get a loan?
—Gargi Sen
A home extension loan can be availed only if you have adequate floor space index to construct it. In your case, there are two ways to obtain the loan. One, your father relinquishes a part of his equity on the land on which the house is constructed in your favour by executing a relinquishment deed and have the same adequately stamped and registered and you get the land records changed. You could then apply for a home extension loan.
Two, if you do not want your father to transfer part ownership to you, it will have to be a joint loan, wherein you can join him as a co-applicant and the entire land along with the present structure and future construction thereon is mortgaged with the lender as security for the loan to be availed by you. You will also need to obtain a letter of consent from other legal heirs of your father.
I got a home loan approved in 2008 but couldn’t avail it. I want to buy a house now. Do I need to pay the processing fee again or just submit the documents?
—Asim
What you are referring to is a pre-approved loan, which is an in-principle approval of the borrower’s loan eligibility, granted after a thorough examination of his income papers and other factors, such as age, professional background, savings history, assets and liabilities and credit score. This kind of loan is for borrowers who haven’t identified a property. Since you are reapproaching the lending institution after a gap of about two years, your lender will certainly do a reassessment of your eligibility by looking at your latest income documents. Payment of the processing fees would depend on the policy of your lender.
I took a home loan in 2008. My salary increased manifold recently and I want to modify the equated monthly instalments (EMI) and finish off the loan early. Please advise.
—Simi Nanda
You could place a request with your lender to increase your EMI while reducing the tenor. For this, you will have to produce your latest income statements. The lender will allow you to increase your EMI as per its assessment.
My house is in the name of my wife, who is non-working. Will the bank give me a home improvement loan? What are my alternatives?
— Srikant Varma
Since your wife is the owner of the house, it will have to be a joint loan, wherein you could join her as a co-applicant for the home improvement loan. Since your wife is non-working, your income will be considered for loan eligibility, but the security for the loan would be a mortgage on the entire property being improved.
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First Published: Mon, May 31 2010. 09 38 PM IST