Refund Home Loans Low Doc and No Doc Home Loans

Both low doc and no doc home loans happen to be ideal for private contractors, self-employed, people with poor credit rating, consumers with financial obligation on their existing mortgages and debtors whose loan applications happen to be turned down by the typical mortgage lenders. These two also works if you have stable net income but are struggling to match the bank requirements.

Low doc home loans are the types of refund home loans that do not expect you to validate your income. Aside from the proof of income source, you will be expected however, to show other records. And so basically, low document mortgages remove the difficulties out of applications for the self-employed. If acquiring revenue records proves to be a hassle, then this house loan product is your best option since it gives rapid and immediate access to financial resources.

Low document mortgages also cost a tad bit more costly as opposed to conventional mortgage loans simply because individuals who purchase them are regarded as high-risk. A much larger down payment is furthermore necessary for both .low document and no document mortgages. More often than not, men and women use low doc home loans to purchase investment properties and residential properties. Low document home mortgages can also be used to refinance active properties purchased by individuals without the latest tax returns or PAYG to validate their salary with proper Home Loan Repayment Calculator.

Low Doc Loans and No Doc Loans are actually categorized into three types, particularly no ratio home mortgages, stated-income (low doc) loans and no document home mortgages.

No ratio mortgages are made specifically for individuals who may not wish to disclose their incomes. That means that there is no income to debt ratios for the lender to think about. The consumer makes up for the non-disclosure via his excellent credit in addition to abundant resources.

Stated-income loans on the other hand would be your option if your household money adjusts per week. But compared to no document mortgage loans, low doc loans require the customer to divulge his financial state and earning capacity, commonly for two years. The client might also be required to bring banking statements and tax returns.

No doc loans are offered to people who are totally unable to qualify for traditional loan products. It is also the suitable type of loan for individuals who do not wish to divulge their financial circumstances.

In the event that you feel that you will be far better off with both a low document loan and no document loan, you may possibly want to speak to a mortgage loan expert first before you actually take out a loan.

[Source: http://www.sooperarticles.com/real-estate-articles/mortgage-financing-articles/refund-home-loans-low-doc-no-doc-home-loans-354957.html?]

5 Essentials of Loan against Property You Can’t Avoid

Availing a loan against property (LAP) has become quite easy these days. The procedure can be completed online on websites. However, as an applicant for LAP, you must be aware of certain criteria to make sure the entire loan procedure happens smoothly.

Here are some aspects to checkout before applying for a loan against property with a bank or financial institute.

1.      The Property Value

Whether you intend to apply for a loan against property on residential or commercial estate, you must know the monetary worth of the property in question. Suppose you need a loan amount of rupees 40 lacs, but the estate’s current market value is only INR 35 lacs, then getting entire amount of INR 40 lacs as loan, is impossible on the concerned property.

The loan amount sanctioned cannot be more than the property’s value. But, you can get up to 70 to 90% of property’s market value as loan. If your loan requirement is higher than the property’s cost, then other financing options have to be considered in combination.

In the above case scenario, however, you may be eligible for a lower loan amount, depending on the income you obtain.

2.      Income & Repayment Ability

LAP is majorly taken when there is a requirement for large amount of money. The mortgage loan approval will depend on your monetary income, and repayment ability. Depending on the income, and EMI scheme suitable, repayment tenure will be decided, which is maximum up to 15 years. You must draw a comfortable income in order to take care of loan against property payments.

The reason why banks are serious about the applicant’s income status is because a person with regular income will be able to pay the EMIs consistently, than defaulting in its payments. So the bank does not have to worry about selling the pledged property to recover the LAP amount, which would otherwise take intensive time and efforts.

3.      Co-applicant for Mortgage Loan

If you alone cannot fulfill the income or repayment capacity essential for getting Loan for Home sanctioned, then you may be able to bring in a co-applicant. The loan providing institute will run a check on the co-applicant to confirm if he/she and you together can repay the mortgage loan amount or not.

4.      Real Estate Ownership

If you are the sole owner of the property, then there must be no problem in acquiring a loan against the same. If there are co-owners who do not agree with your decision of applying for LAP, or the property is disputable with necessary documentation out-of-place, then the mortgage loan can be rejected.

5.      Know the Fees Involved

Apart from the LAP interest rates, there could be other charges such as loan processing fee, pre-closure charges, sales tax, agent cost and more. You must acquaint with all these charges or fees that have to be paid for, when applying for a loan against property.

Keeping the above mentioned factors in mind, you can seek a. Read more to know the finer points about loan against property.

[Source: http://blog.loanbaba.com/5-essentials-of-loan-against-property-you-cant-avoid/]

Do not Overestimate Tax Benefits on Home Loan Repayment

You have some cash in hand because of the recent annual performance bonus that you received. You have not yet decided how to use that money. You have no credit card or personal loan which needs to be settled at a high priority. You only have a home loan but you are not planning to part prepay it because you will lose out on tax benefits.

This is a common refrain among home loan borrowers. They do not want to prepay their loan just because of associated tax benefits. I do not deny that home loan repayment comes with tax benefits bringing down the effective cost of loan through calculating Home Emi Calculator.

However, sometimes, these tax benefits on home loans can be overrated.

Tax Benefits of Home Loans

Deduction in total income by up to Rs 1.5 lacs for principal repayment under Section 80C of the Income Tax Act

Up to Rs 2 lacs for interest payment for a self-occupied property under Section 24 of the Income Tax Act. For a let-out or a deemed let-out property, there is no cap on tax benefit for interest payment.

You may get limited Tax Benefit for Principal Repayment

You may be re-paying more than Rs 1.5 lacs of principal in a financial year. The tax benefit is capped at Rs 1.5 lacs per financial year.

Even if you are paying less, your other Section 80C investments such as PPF, EPF, ELSS, insurance premium etc may exhaust the entire or major portion of Rs 1.5 lacs even before principal repayment comes into picture.

You get tax benefit for principal repayment only once you get possession of the house. Principal repayment done before the financial year in which you got possession of the house does not get you any tax benefit. This assumes important for tax-payers who have purchased under-construction property.

[Source: http://www.personalfinanceplan.in/opinion/do-not-overestimate-tax-benefits-on-home-loan-repayment/]