What is the maximum loan amount?
The maximum amount of loan sanctioned would be minimum of A or B
- A. 80% for upto Rs. 75 lakh, 75% for above Rs. 75 lakh to upto Rs. 2 crore & 65% for above Rs. 2 crore of the total cost of the house (which excludes stamp duty, registration fee, transfer fee, cost of furnishing, etc. if any)
- B. Loan amount as per our eligibility calculations based on repayment capacity of the borrowers
The maximum loan amount would be decided by the repayment capacity of the borrower, which is determined mainly with reference to the present income. However, it should be borne in mind that besides present income, several factors like age, qualifications, spouse's income, present outgoing towards rent, future potential for earning higher income, present level of assets and liabilities of the borrowers, etc. will have a bearing on the repayment capacity of the borrower. In case the net take home income after all deductions (such as proposed EMI, taxes, Insurance premium and other out go) is not sufficient, the eligible amount of loan would then be reduced. The income of co-applicant can be added to that of the applicant to improve the repayment capacity.
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What are the margin requirements?
The margin requirements (i.e. the borrower’s contribution should be as follow –
- 20% of the total cost of the purchase/ construction of house/ flat for loans upto Rs. 75 Lakhs
- 25% of the total cost of the purchase/ construction of house/ flat for loans Above Rs. 75 lakhs to Rs. 2 Crores
- 35% of the total cost of the purchase/ construction of house/ flat for loans Above Rs. 2 Crores
- 20% of total cost of the repairs
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Who can be the co-applicants for the home loan?
The following family members are permitted to join as applicants/co-applicants:
- Father
- Mother
- Son
- Spouse
- Siblings, i.e. brother-brother, brother-sister, sister-sister subject to the property must be in the joint names of the siblings.
The income of these co-applicants can be considered for the purpose of calculation of eligible loan amount. |
What are the loan tenure options?
The repayment period is maximum of 30 years, including the moratorium period of 18 months from the date of disbursal or the completion of the house, whichever is earlier. The repayment period is 10 years in case the loan is availed for repairs of the house.
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What are the applicable rates of interest?
Union Bank of India offers two different schemes (a) Fixed rate of interest (b) Floating rate of interest. Under the fixed rate, the rate applicable during the date of sanction would be applicable throughout the entire duration of the loan. Under the floating rate, the interest rate would vary with the Base Rate of the bank.
Please click here for information on rate of interest.
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What are the processing charges?
Processing charges are 0.50% of the loan amount subject to maximum of Rs. 15,000 plus service tax as applicable.
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How is the interest charged/calculated?
Interest will be applied in the account on the basis of reducing balance method at monthly rests. During moratorium period compounding interest would be charged.
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What is a Monthly Reducing balance?
An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the interest is calculated on monthly rests, the principal on which the interest is charged goes down every month. This results in a significant saving for the customer over the tenure of the loan.
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How do I repay the home loan?
The loan shall be repaid in equated monthly installments (EMIs).
You can pay the EMI in any of the following ways
- Through standing instruction to your Union Bank of India savings account to directly remit the EMI amount to your loan account
- Through internet banking facility available on your Union Bank of India savings account
- ECS (Debit) facility
- Post Dated Cheques (PDCs)
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Can I prepay my home loan?
Yes, you can make your prepayment. There is no charge on pre payment if the loan is adjusted by the borrower from his own verifiable legitimate sources. However, a charge of 2% on the average balance of the preceding 12 months if the loan is taken over.
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What security/ collateral do I have to provide?
Equitable mortgage (EM) of the residential property, proposed to be purchased from Bank's finance, is required. If the house/ flat proposed to be purchased is yet to be constructed or is under construction, interim security may be required (till the period of its completion).
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Is a guarantor a must?
No, third party guarantee is not mandatory in most of the cases for Resident Indian. In case of NRIs guarantee of one/two local residents Indian required. Please visit our nearest branch to know further
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What are the tax benefits I get from my home loan?
Tax benefits can be claimed on both the principal and interest components of the home loan as per the Income Tax Act, 1961. A deduction of up to Rs. 2,00,000 can be claimed towards the total interest that one would pay on the home loan. The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs. 2,00,000. The principal repayment of up to Rs. 1,50,000 on the home loan is allowed as a deduction from the gross total income subject to fulfillment of prescribed conditions. These benefits on interest on housing loans are allowable only for the original loan and for a second loan taken to repay the first loan and not for subsequent loans.
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Can I avail the Top-up loan facility on my home loan?
A top-up loan is a facility for the existing home loan borrowers, who have a good repayment track record, for the purpose of repairs, renovations, furnishings, etc. To know more on the Top Up loan, please see the Special Offers Tab above, or kindly contact the branch where you have availed the housing loan from
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Do I need to open an account with Union Bank of India for availing and/ or servicing the home loan?
Although opening of account is not mandatory for Resident Indian for availing a loan, we would recommend to bank with us in order to benefit from other value added services. For NRI opening of a NRE account with Union Bank of India is mandatory for availing a loan.
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What documents do I need to submit to avail a home loan?
Please see the Forms & Documents Tab above for information on the list of documents required.
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How much time will it take for my home loan to be approved?
It takes 5 days for your loan to be sanctioned, after you have submitted all the required documents.
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What are the stages involved in taking a loan?
There are three main stages -
- Application - Whereby you submit a completely filled in application with all necessary documents
- Sanction - Whereby you get an approval for a specific loan amount based on the value of your property and repayment capabilities
- Disbursement - Whereby the loan amount is disbursed
**Conditions apply. For further details, please contact us at- 9974372131 / 9898399512
or email us at investandharvest@outlook.com
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