If you want to buy a second house, is it the right time to go for one?
In an hour-long chat on rediff.com, personal finance expert Harsh Vardhan Roongta answered to readers' queries on Wednesday. Roongta is the CEO of www.apnaloan.com , an online guide for retail loan seekers. Here is the transcript:
Harsh Roongta CEO Apnaloan.com says, Hello Everyone. Since i have logged in a little early let's get started a little early. I will try to answer as many queries as i can.
sudeer asked, my gross salary is 230,000 per year. I have work experience around 3 years. I have 7 months experience in present company. The company working now is pvt ltd company. What is amount I am eligible if i apply for housing loan
Harsh Roongta CEO Apnaloan.com answers, at 2007-07-25 14:59:07As a rule of the thumb you can get about 3.5 times your annual income as a loan for 20 years. So in your case the loan amount will be in the region of Rs. 8 lacs. If you want a more detailed answer click on this link.
Charlie asked, A Foreign MNC bank did not disuburse my home loan even after signing the Loan Agreement 4 times. despite the fact that my income and property papers were cleared by them. What options are available to me?
Harsh Roongta CEO Apnaloan.com answers, You should file an official complaint on the banks website in teh section reserved for grievances (it is cumpolsory for the bank to have such a section). If the respones is not saqtisfactory you can file a complaint with the banking ombudsman (details on www.rbi.org.in)
pravin asked, Can i get tax benefit for my second home?If both the houses are in my name, can my wife pay the EMI and get tax benefir?
Harsh Roongta CEO Apnaloan.com answers, It is a misconception that tax benefits on home loan repayments are availbale only for 1 property or is limited to Rs. 1,50,000/-. Please see this link for a detailed answer. http://www.apnaloan.com/taxtips/home-loan-india/deductiononmorethanoneproperty.html If the houses are owned by you then your wife cannot claim the tax benefits. she will need to be a co-owner to be able to claim such benefits.
SHBHUSHAN asked, I HAVE TWO YEARS OLD HOME LOAN FROM IDBI BANK OF 20 YEARS .. AS THE PRICES OF FLAT HAVE NOW DOUBLED CAN I SELL OFF & WHAT IS THE PROCEDURE???
Harsh Roongta CEO Apnaloan.com answers, Off course you can sell of the flat. You will need to clear off the loan before you do so. Read the detailed process for selling a property with an existing loan. http://www.apnaloan.com/primers/home-loan-india/sellpropertywithoutstandingloan.html
mangb asked, While filing IT returns, does one need to submit the housing loan certificate along with the ITR2 form to claim refund.
Harsh Roongta CEO Apnaloan.com answers, Not any longer as under the new forms the department is not allowing any enclsoures alongwith the return
john asked, I have booked flat for 38 lakhs, now i feel that EMI is 25,000 /month .NOw i relized that i made big mistake in investing at such a high price.Now im very much tensed how can i manage my EMI , as all my salary go in EMI.I am also planning to sell the flat after completion of work. What is the procedure of selling and transfer the home loan to buyer?.
Harsh Roongta CEO Apnaloan.com answers, already answered a little earlier. please read the chat transcript
firstname.lastname@example.org asked, sir, i took a housing loan of 6.60 lakhs to which i used to pay 5800 emi per month but due increased interest rate i have to pay 7000 around , my interest rate is in floating, which is now a extra burden to me, how can i lessen it
Harsh Roongta CEO Apnaloan.com answers, Try and prepay the loan if you have some surplus money. if not you can try for an increase in tenure. For a more detailed resposne please see the following link. http://www.apnaloan.com/articles/home-loan-india/homeloaninterestratehike.html
pab asked, Is thr any product of a Home loan company whr thr is no pre payment penalty?
Harsh Roongta CEO Apnaloan.com answers, Some banks do have nil prepayment penalty if the pre-payment of upto a certain percentage of the loan amount and is from your own sources.
anikgupta asked, i live in a house owned by my father. i want to contruct another story by taking a loan . is it possible and shall i get the income tax benefits ?
Harsh Roongta CEO Apnaloan.com answers, Off course you can get a loan provided your income is enough to justify the loan and your father is willing to be a co-borrower for the loan. However yoiu will not be eligible for any tax benefits on the loan unless you are a co-owner in the property.
raul_becker asked, hi sir I have just started paying emi for my home @11% for 20 years on a loan of 30L.Bank has recently given me amortization certificate. However when i add all the breakup for this year, the amount does not equal my EMI X 12months. Please explain how this amortization works Thanks raul
Harsh Roongta CEO Apnaloan.com answers, Amortisation is a technical term for the arithmetic used to break up a particular EMI into its principal and interest component. The artithmatic is a little complicated so difficult to explain in a chat like this. Anyway you can us ethis simple amortisation calculator. http://www.apnaloan.com/loan-advice-india/amortisation.html
email@example.com asked, i am currently working in indonesia, sir am i eligible to take another flat, my salary not paid in india.
Harsh Roongta CEO Apnaloan.com answers, I am assuming that the nature of income is such that the continuity of such income can be reasonably assumed. If that is so than you should not have any difficulty in getting a home loan. If you are not an Indian Citizen than the number of banks who will be willing to lend to you may be more restricted.
DHARMENDAR asked, I have taken a home loan against a newly constructed Apartment from a reputed builder. Apart from this I stay in another house owned by my dad. I am getting the possesion of my apartment in August 2007 and my home loan is running since october 2004. kindly guide me how to claim my tax benefits.
Harsh Roongta CEO Apnaloan.com answers, You will be able to claim tax benefits from the current financial year ending March 31, 2008 (assuming that the poroperty is constructed before that date). Apart from the entire interest payable for this financial year (including the under construction period interst from April1, 2007 till the date the property is fully constructed)you will be able to claim 1/5th of the interst payable in respect of all period prior to April 1, 2007. The overall limit for the interst deduction will be Rs. 1,50,000/- if the property is self occupied.
RAMAN asked, DEAR SIR, WHAT IS THE SHORT TERM CAPITAL GAIN TAX RATE ARISING OUT OF SALE OF FLAT WITHIN 2 YEARS OF PURCHASE. IS IT 10% OR 30%. I HOPE YOU WOULD REPLY. REGARDS
Harsh Roongta CEO Apnaloan.com answers, It
will be the regular rate of taxation applicable to you. Short term gains on property are taxed at the same rate as any other normal income.
abc asked, Hi Harsh,I have taken two loans of 12 and 7 lacs from ICICI( none is for renovation) for the same property. The registered value at the time of buying was 12 lacs and now I want to sell it at a registered value of 19 lacs. What are the tax implications. For last Fiscal can I take tax benefit for both loans
Harsh Roongta CEO Apnaloan.com answers, Since the registeration value of the property is only Rs. 12 lacs obviously the loan for Rs. 7 lacs was not taken for its acquisition (even if you used the money to make unaccounted payment to the seller it does not count for income tax purposes). Hnece there is no question of any tax benefit on the loan repayment of Rs. 7 lacs loan.
gayi asked, Presently i hv an outstanding hsg loan for 6.75L @7.5%. should i repay or invest it elsewhere instead of repaying .pl advise
Harsh Roongta CEO Apnaloan.com answers, Well if your interest rate is only 7.5% you should definitely look at using your surplus money to generate higher returns in other avenues.
Narcissus asked, Hello, I have a home loan of around 11.6 Lakhs. Will I get tax benefit on the amount I pay as pre-payment to the bank ?? (I'm already getting tax benefits on principal and interest components.)
Harsh Roongta CEO Apnaloan.com answers, Pre-payment is payment of principal to the bank and is eligible or tax benefit on the same basis.
Manohar asked, I have already taken a home loan from Bank and getting benefits for tax. But now i am planning to buy a second house in the same city where i live so will i get the tax benefit for the second house also? I will do the registeration on my name as well as my wife name so can i get the benefit for stamp registration also? Can i claim the tax deduction for both the house? Will i have to pay any extra tax for owing two houses. Please guide me.
Harsh Roongta CEO Apnaloan.com answers, on tax benefits have already responded a little while earlier to a similiar query. as far as your other query is concerned you will need to pay wealth tax on your second house if the value (net of loans outstanding) exceeds Rs. 15 lacs.
ashutosh asked, i have taken a house with my father (50% share each ) but i am the only one taking loan. Cna i get the full 150000 interest rebate
Harsh Roongta CEO Apnaloan.com answers, yes you can
don asked, Sir my wife has a housing loan from ICICI bank for 30lacks. I feel this bank is expensive, can we get 15 lacks each from a nationalized bank and can we both claim Income Tax exemption. Pl suggest.
Harsh Roongta CEO Apnaloan.com answers, Firstly you will not be able to get 2 separate loans from 2 banks on the security of teh same property. Secondly unless you are a co-owner you will not be able to get tax benefits for loan repayments.
kamlesh asked, i have 2 houses. on the second home, can i claim unlimited loss on account of interest on loan
Harsh Roongta CEO Apnaloan.com answers, Yes you can but you will also need to take into account 70% of the rental that the property would have earned had it been rented out
sarangan asked, Which is better? Floating or Fixed ROI... Talk is that the Floating has almost stabilized and may not go up further... what is your suggestion
Harsh Roongta CEO Apnaloan.com answers, This is not a one time desicion. You will need to continue to revbiew this desicion on at least a 6 monthly basis. In the current scenario Apnaloan.com recommends a floating rate loan. For detailed response please read this link. http://www.apnaloan.com/articles/home-loan-india/tostayputortofloathomeloanarticle.html
edwin asked, am planning to buy a flat in delhi but i am finding difficulty in making arrangement of initial amount(downpayment)...which generally requires a large amount of liquid cash.What are the different options
Harsh Roongta CEO Apnaloan.com answers, It will a;lways be difficult ot fund the down payment amount and even more so if it is payable in cash. Some suggestions are PF withdrwals, loan against security or an unsecured loan. Detailed response availabale on thsi linbk. http://www.apnaloan.com/primers/home-loan-india/downpayment.html Avi asked, I want to take loan of 6 lakh for 10 ye to buy 10 marlas plot for making house. My mothly salary is 12000/- per month. Is it a good for me. Please suggest. I am govt employee.
Harsh Roongta CEO Apnaloan.com answers, Based on your salary an assuming you want to restrict the tenure to 10 years only you will be eligibel for a home loan of around Rs. 3 lacs. Please see the eligibility calculator on this link. http://www.apnaloan.com/loan-advice-india/simple-loan-eligibility.html
Narcissus asked, Sir, It has been noticed that in the recent past the banks have raised interest rates (floating as well as fixed) bcos of RBI regulations and have duly passed the load onto the existing as well as new customers. BUT whenever, in rare cases, there is decrease in interest rates, these banks pass the benefit only to the new applicants and NOT to the existing customers. It is very unfair on the part of the banks. IS IT POSSIBLE TO SUE THE BANKS ON THIS ISSUE ??
Harsh Roongta CEO Apnaloan.com answers, You have raised a very important issue. But first some clarifications. RBI does not govern home loan rates. These are fixed by banks themselves. RBI only makes policies and provides signals and conducts operations in the market which has an important bearing on the market's view on interest rates. However the final interst rates are fixed by the banks themselves. Secondly the point you mentioned about not passing on the benefit to existing consumers is very true but unfortunately the only thing that the consumers can do is to be vigilant and vote with their feet by opting to move to another lender if the existing lender does not give the full benefits of rate reduction.
spanth asked, I took a home loan jointly with wife. she is also co owner of the property. can we both take tax benefit (50-50 or other percentage)
Harsh Roongta CEO Apnaloan.com answers, yes you can. see this link for detailed answer. http://www.apnaloan.com/taxtips/home-loan-india/deductionbenefitstocoowners.html
raam asked, Hi i have rented my home which is on loan,and am paying rent as well to my lanlord.I saty in d same city.CAN i claim both HRA and the 1.5L deduction avlbl. on home loan??
Harsh Roongta CEO Apnaloan.com answers, Claiming exemption of HRA is completely delinked form claiming tax benefits on a home loan. It does not matter about which city you stay in and in which city the owner property is in. see this link for a detailed answer. http://www.apnaloan.com/taxtips/home-loan-india/taxdeductionbenefitsforhlhra.html
Harsh Roongta CEO Apnaloan.com says, ok folks this was a real pleasure chatting with all of you. The chat transcript should hopefully answer all your questions and for any further queries you can log on to www.apnaloan.com and use the ask apnaloan feature on the site.