INDEX

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Factors Affecting. Property Aspects Financial & other aspects. Property Title proof. Negative Aspects. Financial Highlight of HFIs. Financial Highlights of Banks. Operational Highlights. Shareholder wealth. NPA Comparison. HFIS V/S BANKS.

Factors affecting property decision

Property Aspects
Price - A price obtained for a specific property under a specific transaction which also includes property price, stamp duty and registration, society charges, brokerage and others. Locality - a surrounding or nearby region. Transportation - movement of people and goods from one location to another. Infrastructure - The basic physical systems of a country's or community's population, including roads, utilities, water, sewage, etc. Goodwill of builder - good will means an intangible asset valued according to the advantage or reputation a business a person has acquired over and above period or time. Availability of properties.

Financial and other aspects

Financial and other aspects

1. 2. 3. 4. 5. 6. 7. individual budget. ROI & loan period EMI (equitable monthly installments) Individual eligibility Documentation Services (ecs chq. standing inst.) Sanction and disbursement time.

INDIVIDUAL BUDGET 1.Own contribution. 2.Stamp Duty and Registration 3.Brokerage. 4.Society transfer charges. 5.Parking charges if needed. 6.Advance maintenance if required by builders. 7.Processing fees.

Individual eligibility
1. 15% - 20 % Should be owned contribution. 2. 50% - 60 % Loan can be sanction on total income. 3. 75% - 85% of agreement value can be sanction. 4. Stamp duty and registration amount can be added to loan agreement.

Rate of interest.
Fixed - The rate of interest is fixed for entire loan period taken by individual. Floating It depends on the Market conditions, Bank and regulatory body like RBI. Partly - It depends on the Individual bank to provide new offers like 2yrs fixed and rest tenure floating.

ICICI BANK Category Upto Rs. 30 Lacs Rs. 30 Lacs Rs.50 Lacs Above Rs. 50 Lacs ROI (%) 8.75% 9.00% 9.50%

HDFC BANK Category Upto Rs. 30 Lacs Rs. 30 Lacs Rs.50 Lacs ROI (%) 8.75% 9.50%

Loan Schemes SBI HI-FIVE Loan Loan Amount upto Rs. 5 Lacs

1st Year 8.00% (p.a.) Fixed interest

2nd and 3rd year 9.00% (p.a.) Floating Interest Rates OR 10.50% (p.a.) Fixed ROI

After 3rd Year 9.00% (p.a.) Floating Interest Rates OR 10.50% (p.a.) Fixed ROI

SBI Easy Home Loan Loan Amount upto Rs. 50 Lacs

8.00% (p.a.) Fixed interest

8.50% (p.a.) Fixed Interest Rate

9.00% (p.a.) Floating Interest Rate OR 10.50% (p.a.) Fixed ROI

SBI Advantage Home Loan Loan Amount Above Rs. 50 Lacs

8.00% (p.a.) Fixed interest

9.00% (p.a.) Fixed Interest Rates

10.00% (p.a.) Floating Interest Rate OR 10.50% (p.a.) Fixed ROI

Documentation
Confirmation of Income :If you are a salaried person, please provide two recent consecutive pay slips or a copy of your employment contract or a letter from your employer. If you are self-employed, please provide copies of your last two Financial Accounts as prepared by your accountant. Appointment Letter, Salary Certificate, Retainer ship Agreement, if appointed as a consultant FORM 16 issued by the employer in your name. Last three years income tax returns duly filed and certified by the Income Tax Authorities Similar Document -separately for each co-applicant. Employment Proof :Identity card issued by your employer, Visiting card , Age Proof :Passport , Voter's ID card PAN card, Ration card, Employer's Identity card, School leaving certificate , Birth certificate Residence Proof :Ration card, Passport, PAN card, Rent agreement, if you are staying currently on rent, Bank Pass book. Bank statement for the last six months of all operating and salary accounts Bank statements for the last six months of all current accounts, if self-employed. Any other photocopies of investments held, if required by the Bank

Property Title Proof

Original Sale agreement with Builder/Developer duly registered, Registration receipt Land documents indicating ownership, e.g.- Photocopies of title deeds, if applicable A certificate by the legal advisor of the builder to the effect that the builder has a good reputation and it is free from encumbrance and other charges. A certificate from builder's Chartered Accountant certifying that the builder has not mortgaged the property anywhere else. Certified true copy of approved plan. Copies of receipts of payments made to builder/developer. Allotment letter, Possession letter Mortgage deed if the Bank opts for a registered mortgage. No Objection Certificate from the developer, society or development authority as applicable Personal Guarantees, if applicable. In case of alternate or additional security, documents for the same depending upon the security details. For self-construction: Approved plans and clearance certificates along

1. 2. 3. 4. 5. 6. 7. 8. 9.

Area. Profession. Builders. Credit rating. (personal loan credit card home loan) Employed with certain industries like BPO, Proprietor ship or Pvt. ltd Companies. Income.( As per KYC norms) Field investigation. Property verification Pagadi system, SRA, Mahada. Property should be approved by regularity authority like Mahada, MMC & CIDCO.

Negative aspects

Area
Negative areas Refers to the areas on which banks / financial institutions do not give loans. Examples are given below. For e.g. Mira Road (some part) , Mumbra, Diva, Ulhashnagar. Gaonthan properties. Slum locality. Minimum sq. feet area. Forest land.

Profession
Banks have conservative approach towards giving loans to lawyer, Builders, Doctor, Politician. Sole Proprietor and entertainment industry, Anti social aliments and criminal activities e.g. Local Gangs.

Profession Builders

Small builders. Black listed builders.

Income not considered

Certain income are not considered by bank / Financial institution while calculating the eligibility of individual. It is not considered as income. Income from shares and securities. Rental Income if not declared in IT. Income from Mutual fund Interest on fixed deposit. Income which is not declared in Form 16. Cash salary. Family income should not be considered. Any Fluctuating income.

FINANCIAL HIGHLIGHTS - FY 2008-09 HDFC COMPANY LIC HF

INCOME EXPENSES & CHARGES NPBT NPAT OWNED FUND LOAN FUND CURRENT LIAB. & PROV. DEFERRED TAX LIABILITY TOAL LIABILITIES FIEXD ASSETS (NET) INVESTMENTS LOANS NET CURRENTS ASSETS, LIABILITES & ADV. 11,018.00 7,798.00 3,220.00 2,283.00 13,137.00 83,856.00 4,663.00 101,656.00 203.00 10,469.00 85,198.00 5,571.00 2,912.00 2,186.00 726.00 532.00 2,234.00 25,421.00 1,728.00 29,383.00 32.00 1,129.00 28,086.00 135.00 -

Rupees in Crores

DEWAN HF 694.00 569.00 125.00 92.00 514.00 5,876.00 117.00 5.00 6,511.00 50.00 109.00 5,807.00 546.00 -

TOTAL ASSETS

101,656.00

29,383.00

6,511.00

FINANCIAL HIGHLIGHTS - FY 2008-09 SBI COMPANY ICICI

INCOME EXPENSES & CHARGES NPBT NPAT OWNED FUND LOAN FUND CURRENT LIAB. & PROV. DEFERRED TAX LIABILITY TOAL LIABILITIES FIEXD ASSETS (NET) INVESTMENTS LOANS NET CURRENTS ASSETS, LIABILITES & ADV. 76,479.00 67,358.00 9,121.00 5,059.00 57,948.00 795,787.00 110,697.00 964,432.00 3,574.00 275,954.00 542,503.00 142,401.00 39,210.00 35,452.00 5,117.00 3,758.00 49,883.00 285,672.00 43,746.00 379,301.00 3,802.00 103,058.00 218,311.00 54,130.00

Rupees in Crores

BOB 17,849.00 15,622.00 2,227.00 1,116.00 12,836.00 198,033.00 16,538.00 227,407.00 2,310.00 52,446.00 143,986.00 28,665.00

TOTAL ASSETS

964,432.00

379,301.00

227,407.00

Operational Highlights
APPROVALS, HDFC 50,000.00 45,000.00 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 HDFC LIC HF DEWAN HF APPROVALS, LIC HF DISBURSEMENTS, LIC HF APPROVALS, DEWAN HF APPROVALS IDSBURSEMENTS DISBURSEMENTS, HDFC

DISBURSEMENTS, DEWAN HF

HFI'S APPROVALS DiSBURSEMENTS % DISBURSED TO APPROVALS 49,166.00 39,650.00 81.00 8,186.00 7,351.00 90.00 2,698.00 2,266.00 84.00

SHARE HOLDERS WEALTH

50 0.0 0 45 0.0 0 40 0.0 0 35 0.0 0 30 0.0 0 25 0.0 0 20 0.0 0 15 0.0 0 10 0.0 0 50 .0 0 E A R N IN G S P E RB O O K V A L U E P E R ID E N T R A TE (% )IV ID E N D P A Y O U T D IV D S H A R E (R S ) S H A R E (R S ) F V R S 1 0. R A TIO (% ) DE W A N HF L IC H F HDFC

HFI'S EARNINGS PER SHARE (RS) BOOK VALUE PER SHARE (RS) DIVIDENT RATE (%) - FV RS 10. DIVIDEND PAYOUT RATIO (%)

HDFC 80.10 462.00 300.00 43.50

LIC HF 60.34 263.00 130.00 24.39

DEWAN HF 15.15 71.00 25.00 19.31

NPA COMPARISION
NPA % 5 .0 0 4 .5 0 4 .0 0 3 .5 0 3 .0 0 2 .5 0 2 .0 0 1 .5 0 1 .0 0 0 .5 0 SBI IC IC I BOB N P A % , B O B , 1 .2 7 N P A % , S B I, 2 . 8 4 N P A % , IC IC I, 4 . 3 2
1 .6 0 1 .4 0 1 .2 0 1 .0 0 N P A % , L IC H F , 1 . 0 7 N P A % , H D F C , 0 .8 1 NPA% NPA% NPA% , DEW AN HF, 1 .4 7

N P A %0 . 8 0
0 .6 0 0 .4 0 0 .2 0 HDFC L IC H F DEW AN HF

HFI'S HDFC LIC HF DEWAN HF

NPA% 0.81 % 1.07 % 1.47 %

BANKS SBI ICICI BOB

NPA % 2.84 4.32 1.27

HOUSING FINANCE V/S BANKS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Housing Finance Specialization Personalized service. Fast approvals. Structured and proper documentation. Good after sales services. Competition. No Quota system. Competitive ROI. Large branch network. 24 x 7 call center or Help line. Multiple schemes ROI - Terms. Proper recovery approach. Aggressive marketing strategy. High processing charges. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Banks. Multiple products. No personalized service. Lengthy procedures. Structured and proper documentation. Less competitive after sales services. Low competition. Quota system. Aggressive ROI. Limited branch network. Working hrs. call center or Help line. Multiple schemes ROI - Terms. Proper recovery approach. Less aggressive marketing strategy. Comparatively less processing charges.

COMMON PROBLME S OF BORROWE RS

most common Home Loan problems faced by borrowers in India

1 Rejection at the first stage Strange but true, many of the home loan applications do not pass even the first test. They are out rightly rejected due to. It could be the age criteria, income criteria, proper documents not being submitted, the bank not being able to verify your details properly, not passing the field investigations conducted by the bank and many more. 2. Processing fee not refunded With every application form for home loans, banks require about 0.25% to 1% of the loan amount to be submitted as the processing fees. This processing fees is generally NOT REFUNDABLE. 3. Desired loan not sanctioned The loan amount sanctioned is based mostly on repayment capacity of the borrower. Many things come into picture, when the bank decides how much home loan a person can get. The monthly income, financial history, other unpaid loans with the borrower, past repayment record, credit card usage history if any, bounced checks, average balance with the banks, continuity in present employment, total years in employment, nature of employment etc

4. The interest rate dilemma Whether to go for a fixed rate or floating rate interest for home loans is a dilemma which almost every home loan borrower faces. 5. Difference in property valuation The bank has its own experts for legal, technical and financial appraisal of the property in question. It evaluates the property on its own established parameters and assigns a value to it. This value can be significantly lower than the price you quoted for the property. 6. The down payment Banks require the borrower to fund at least 10% to 20% (varying from bank to bank) of the entire loan amount as the down payment for the home loan. This amount has to be deposited before the disbursal of the home loan. In the absence of such down payment the bank will refuse home loan to the borrower. 7. Title deeds and NOC Documentation Problems The title deeds and NOC documents have to be furnished in the bank's format. Borrowers who don't provide such documents in proper format, will ruin the entire exercise and won't get any home loan. To avoid falling into such uncomfortable situation, enquire about all the documents required by banks beforehand and take necessary steps to get them ready within the stipulated time frame.

"All I ask for is an opportunity to prove that money doesn't buy happiness." "All the happiness you ever find lies in you."

Conclusion The above mentioned problems are very common, but can be easily avoided if the borrower follows proper procedure, prepares adequately before applying and takes care of correct documentation.