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A detailed repayment table showing how each EMI is split between principal repayment and interest throughout the loan tenure.
A systematic process of repaying a home loan through monthly installments that cover both principal and interest. Over time, amortisation gradually reduces the loan balance, leading to full ownership of the property.
The yearly cost of a mortgage, including the interest rate and additional charges. APR helps borrowers assess the true cost of their home loans and enables comparisons across lenders.
A professional assessment of a property’s market value, essential in determining the loan amount in loan-to-value ratios (LTV). Appraisals reduce lender risk and support home loan approvals.
Strategies used by banks to balance assets and liabilities, ensuring stability in home loan interest rates. ALM is key for lenders offering fixed-rate and floating-rate mortgages.
When a borrower transfers an existing mortgage to a new owner. Mortgage assumptions allow the new borrower to inherit favourable loan terms, such as a lower interest rate.
Properties auctioned due to default can provide buyers with below-market prices. However, auction property purchases require thorough checks, including clear title verification.
The process of transferring an existing home loan from one lender to another to obtain lower interest rates or better loan terms.
A financial guarantee from a bank to cover borrower liabilities if they default. Bank guarantees are common in high-value property transactions to manage risk.
The minimum lending rate set by the Reserve Bank of India (RBI) that impacts all home loan interest rates, including floating-rate mortgages.
An intermediary who connects borrowers with lenders, offering guidance on various loan types, including joint home loans and fixed-rate mortgages. Mortgage brokers simplify the home loan process.
The total area covered by a property, including the carpet area, wall thickness, and balcony. Built-up area is a critical metric in Indian real estate.
A credit score issued by TransUnion CIBIL ranging from 300 to 900 that reflects a borrower's creditworthiness. A higher CIBIL score improves home loan eligibility and may help secure lower interest rates.
A person who jointly applies for a home loan with the primary borrower. Including a co-applicant can increase loan eligibility and improve repayment capacity assessment.
A person who legally owns a share in the property. Co-owners are often included as co-borrowers in joint home loans.
The minimum property value determined by state governments for calculating stamp duty and registration charges.
A limit on the increase of interest in a floating-rate mortgage. Caps provide borrowers with protection from sharp fluctuations in home loan interest rates.
The net usable floor area within a property, excluding external spaces. Carpet area is essential for calculating home loan eligibility and the property’s value.
A title that is free of encumbrances, legal issues, or pending dues. A clear title is necessary for mortgage approvals and loan against property (LAP).
Fees paid at the completion of a mortgage, including stamp duty and registration fees. These costs add to the overall expense of owning a property.
An asset, typically the property, pledged to secure a loan. Collateral lowers lender risk, essential in loan against property (LAP) transactions.
A comprehensive evaluation of a borrower’s creditworthiness. Credit appraisals affect home loan eligibility, interest rates, and approval for joint home loans.
A legal document transferring property ownership. In home loans, a deed confirms ownership transfer from the seller to the buyer.
The initial cash contribution made by the borrower toward the property’s price. A higher down payment can lower EMIs and loan-to-value ratio (LTV), often leading to favourable interest rates.
A fixed monthly payment made toward repaying a home loan, consisting of both principal and interest components. EMIs continue until the loan is fully repaid.
A document verifying that a property is free from financial or legal liabilities. Essential for home loan and loan against property (LAP) approvals.
The difference between the property’s market value and the outstanding mortgage balance. Equity can increase over time, allowing homeowners to leverage it for a loan against property.
A third-party account holding funds for property expenses. Although rare in India, escrow can be used for high-value property transactions.
A home loan with a stable interest rate throughout the term, ensuring predictable monthly EMIs for borrowers.
A variable interest rate that adjusts based on the RBI’s repo rate. Floating rates impact EMI payments over time.
A lender-initiated process where the property is taken over due to borrower default. Foreclosures affect borrower credit scores and future home loan eligibility.
The maximum loan amount a borrower qualifies for, based on income, age, and financial stability. High eligibility often leads to better interest rates and loan terms.
The cost of borrowing on a mortgage. Interest rates can be fixed or floating, directly affecting monthly EMIs and overall loan expenses.
A home loan with multiple borrowers, typically family members, which can enhance loan eligibility and offer tax benefits.
The process through which a lender releases the approved home loan amount to the borrower or seller.
A secured loan where a borrower uses property as collateral. LAP allows homeowners to leverage property equity for personal or business needs.
A legal contract detailing the terms of a home loan, including repayment schedules and interest rates.
The ratio of the loan amount to the appraised property value, indicating risk. A lower LTV is favorable for securing home loans with better terms.
A temporary period during which a borrower is not required to make full loan repayments, subject to lender policies.
Insurance protecting lenders if borrowers default on a high LTV loan. This coverage enables higher loan amounts while managing risk.
A measure of a property’s profitability after deducting expenses. NOI is vital for evaluating rental property investments.
A loan considered non-performing if unpaid for over 90 days, impacting a bank’s finances. NPAs can lead to foreclosure or auction of the property.
A legal document certifying that a building complies with regulations and is suitable for occupancy. OCs are required for securing home loans.
A lump-sum payment made toward the principal amount before the scheduled due date, reducing either the EMI amount or loan tenure.
Fees levied by lenders when borrowers repay their loans before the agreed tenure, subject to regulatory guidelines.
A government scheme providing interest subsidies on home loans for first-time homebuyers, promoting affordable housing.
A lender’s preliminary offer based on a borrower’s finances, allowing them to understand their home loan eligibility and budget.
Interest-only payments made on a partially disbursed loan, often during property construction. Pre-EMI allows lower payments until full EMI begins.
A local tax on property ownership, impacting overall costs. Property tax rates vary by location and must be paid annually.
A regulatory body established under the Real Estate (Regulation and Development) Act, 2016 to promote transparency and accountability in the real estate sector.
Replacing an existing loan with a new one, often to secure better interest rates or reduce EMIs. Refinancing can provide significant savings.
Fees paid to register property ownership with local authorities, a mandatory step in India’s home loan process.
The rate at which the Reserve Bank of India lends to commercial banks. Repo rate changes affect floating-rate mortgages and loan against property costs.
A loan product for senior citizens allowing them to convert home equity into cash without selling the property, creating a steady income.
A provision of the Income Tax Act that allows deductions on the principal repayment component of a home loan, subject to prescribed limits.
An income tax provision allowing deductions on home loan interest paid for self-occupied and rented properties.
An official letter from a lender approving a home loan based on eligibility and terms. It is a critical step in finalizing the mortgage process.
A government tax on property transactions, calculated as a percentage of the property’s market value. Stamp duty must be paid before property registration.
A payment plan where the developer covers interest during construction, reducing the financial burden on buyers until possession.
A unique identifier for land parcels, essential for verifying ownership. Survey numbers are widely used in property transactions.
An additional loan offered to existing home loan customers over and above the outstanding home loan amount, often at attractive interest rates.
Tax benefits on home loan principal and interest under Section 80C and Section 24 of the Income Tax Act, allowing borrowers to reduce tax liabilities.
The legal right of ownership over a property, verified during a mortgage application. Clear title is crucial for home loan approvals.
The lender’s evaluation of a borrower’s credit profile and property to assess loan risk and eligibility. Underwriting is central to determining home loan approval.
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