To help readers keep pace with what’s happening in the real estate sector, Mint’s Q&A will appear every other Monday.
I already have a home loan and want to take a second loan. Is it advisable to do so? Alternatively, should I pre-close the existing loan and then go for a new one? Would the second loan also be eligible for tax deduction benefits? Also, which loan provider should I apply from?
Before taking a final decision, it is advisable to first evaluate your long-term financial commitments. This will also help you decide if you would like to service the second loan while retaining the first one.
Renu Sud Karnad
Coming to your query on which loan provider to go in for, it would make sense to approach your existing one,as it will simplify the evaluation process, especially if you have had a good repayment track record. As for tax benefits, for a self-occupied property, under Section 24, you would be entitled to deduction up to Rs1.5 lakh per annum on account of the interest paid. And, under Section 80 C, the principal amount repaid on housing loans is deductible up to Rs1 lakh. Your second home loan, too, can fetch you tax benefits where one of the properties is rented out. There is no cap on the interest amount (net of rental income, repairs) on the home loan that you can claim as tax benefit on a rented house.
While settling on a second-sale flat in a society, how do I know if the property meets all the approved norms of the financial institutions and that they will agree to give a loan against it?
Before finalizing a property, it is important that you select your loan provider and discuss the options with them. While approving a property, the financial institution usually undertakes a thorough study of the property’s legal and technical documents, checks if the society has obtained all clearances from the authorities concerned, and also helps in price evaluation.
Resale markets are predominantly localized and unorganized, and therefore you may need to tap into the resources of your loan provider and seek their assistance.
Renu Sud Karnad is executive director with HDFC.
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