How to Secure a SBI Home Loan for Less Than the Remaining Property Value
Many homebuyers face the challenge of determining the optimal amount for obtaining a home loan from SBI. A common question is whether it is feasible to secure a home loan amount that is less than the remaining property value after the down payment has been made. The answer is yes, you can opt for a loan that is tailored to your financial capacity.
Understanding the Down Payment and Remaining Loan Amounts
In a typical home purchase, a down payment is often made, followed by structured installments. For instance, if you have already paid 50% of the total cost and have completed three installments of 15, 15, and 20, with an installment of 20 pending, you can elect to pay the last installment from your own resources.
Applying for a Home Loan for the Remaining Amount
After settling a portion of the cost and making deposits, you can apply for a loan to cover the rest of the unpaid balance. This approach ensures that you do not overextend your finances while still obtaining the loan.
The loan amount will be based on the value of the underlying asset, typically the house. SBI and other banks generally sanction loans that are less than 80% of the property's value. Therefore, if the house is valued at more than double the loan amount, the bank will not face any issues in providing the loan.
Disbursement Procedure and Documentation
The disbursement process for SBI loans involves a demand letter from the builder, along with an architect's certificate. Once you submit these documents to the bank, they will make the payment directly to the builder within a few days.
It is essential to understand that the bank will not provide funds until the builder's demand is documented. This ensures transparency and prevents any potential fraud.
Additional Costs and Financing Strategies
In addition to the down payment, there are other costs like stamp duty (0.5%) and insurance cover charges (0.5%). If you choose to secure a loan for the full 50%, you might incur unnecessary processing fees. Therefore, it is crucial to decide on the exact loan amount that suits your financial needs.
Banks often calculate EMI based on the total loan amount, even though interest is only calculated on the disbursed amount. Choosing a smaller loan amount could help you save on monthly EMIs. You can also opt to make partial payments towards the EMI while the loan is disbursed.
Conclusion
Securing a home loan from SBI for an amount less than the remaining property value is entirely feasible. It allows you to tailor your financial commitments to your comfort and better manage your monthly expenses. Always consult with your bank or financial advisor to explore the best options for your specific situation.