Features of Corporation Bank Home Loans
The loan has the following notable features which require a mention:
- The project cost which would be taken into consideration by the bank for granting the loan would be only the purchase price of the house or the flat excluding any other relevant costs like the documentation charges, stamp duty or registration costs. However, if the purchase price is lower than or limited to Rs.10 lakhs, the project cost may include the above-mentioned costs (registration costs, stamp duty and documentation charges).
- The loan fulfils multiple purposes like financing the construction of a house or a flat, meeting the cost of purchasing a ready-made or under-construction house or flat, taking over any outstanding balance of a home loan taken from other institutions or banks, financing the purchase of a plot of land or a site and constructing a house thereon, financing the purchase of a roof-top Solar PV.
Home Loan Amount
The amount of loan granted by the bank would depend on the geographical area of the property. If the loan is taken for purchase of a plot of land or a site and for constructing a house thereon, the cost of the site or the plot should be more than 60% of the project cost. The following table shows the amount of loan granted in relation to the area where it is taken:
Maximum amount of loan
Maximum amount of loan for site
Port Town areas (excluding metro areas) & Urban centers
- The bank also requires a security while granting the loan. The primary security would be the mortgage of the house or flat which is purchased through the loan. If an older house or flat is purchased, it should not be more than 30 years old. A co-obligation of the spouse is compulsory if a third party guarantee is not available. If the applicant is unmarried, divorced, widower or a widow, co-obligation of the parents, son, daughter, brother or sister or a suitable third party guarantee would be required. The co-applicant in this case may be of any age.
- The individual can choose to prepay his loan any time he wishes and the bank would not charge any prepayment penalty from the applicant
- When buying a ready house or a flat, the bank would disburse the loan along with the margin money directly to the builder or the seller. If the loan is taken for a house or flat which is under construction, the loan would be granted in stags based on the progress of the undergoing construction.
- There is a repayment holiday under this loan scheme which is also called the moratorium period. The moratorium period is granted for a maximum period of 18 months.
- The loan should be repaid within a maximum tenure of 30 years which also includes the moratorium period granted. The repayment tenure would depend on the age of the person availing the loan, the age of the property and the type of the property for which the loan is taken. For salaried class individuals, the repayment tenure would not exceed their age of retirement. For non-salaried individuals, 70 years is the maximum age by which the loan needs to be repaid in full.
- The Equated Monthly Installments (EMI) or Notional Interest of any existing loan and any proposed loan should not exceed 50% to 70% of the borrower’s net monthly income.
- Salaried individuals can avail of flexible, progressive or step-up installment facilities to repay their loans
- Applicants can also avail of another loan to enhance the funding from the first loan subject to terms and conditions of the bank
- The property for which loan is sought and which is the primary security under the loan should be insured and the insurance premium would have to be paid by the borrower.
- The home loan has a processing fee of 0.50% of the loan amount up to a maximum of Rs.50, 000