I am a 47-year-old tuition teacher. Since my income is based on cash earnings from tuition fees, I have not filed my income tax return (ITR) in the last five years. Am I eligible for a home loan?
—Name withheld on request
While having a formal source of income like bank credits, income tax filings, salary slips help financial institution to check and process loans, getting a home loan with your nature of business could be slightly difficult.
However, you may approach specialized housing finance companies who have customized programmes for assessing informal incomes.
Keep your PAN, Aaadhar card, bank passbook and customer ledgers/receivable records ready. Avoid third-party agents and money lenders as they charge very high rates. There are many institutions that help first-time woman borrowers with no credit history and informal sources of income.
I am a 36-year-old state government employee. I am looking to purchase a plot of land to build my house. I am also eligible for a staff loan of up to a maximum of my annual basic salary. I would need a home loan in addition to the staff loan. Should take the staff loan or just a home loan?
—Name withheld on request
Since you have not mentioned any required amount or your monthly commitments, here are the points to keep in mind while going for a home loan:
Loans to buy plotted lands are given by all leading financial institutions, but these are not eligible for tax deduction as they are not categorized as home loans.
Taking a composite loan for plot purchase and construction is advisable. These are provided with certain timelines for the construction to start post plot purchase and completion time for construction.
Most of the financial institutions classify these as home loans once the construction begins. You would need to construct as per an approved plan and as per applicable bye-laws. Disbursal is done in tranches as per progress of construction.
Staff loans come with a lower interest rate than a home loan. However, the EMI (equated monthly installments) of a staff loan would be deducted from the payroll directly, and as mentioned by you, the amount is limited to your basic salary.
Amit Diwan is chief distribution officer-IMGC (India Mortgage Guarantee Corporation)
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Updated: 26 Jun 2023, 10:26 PM IST