With the trend of people buying their first home even before getting married coupled with rapid urbanization, the demand for the Canara Bank home loan has seen significant growth. This being a priority sector lending with a lesser proportion of default, banks find home loan segment very attractive. Canara Bank, a Public Sector bank, has been a key player in home loan segment.
Purposes for which Canara Bank Home Loan can be availed
Canara bank offers home loans not only for buying an under construction property or a ready property from a developer but also offers it for buying a second-hand house. One can avail the home loan even for the purpose of buying a plot of land to construct a house or for constructing a house on a plot of land you already own. The maximum amount which the bank finances for the purchase of a plot of land will not be more than 60% of the total amount of the home loan including for the construction of the house.
The home loan from Canara bank can be availed even for the purpose of repairing/renovating/extending your existing house property, however, the loan available for such purpose is restricted to Rs. 15 lakhs. In case you already have a running home loan and wish to shift this to another lender for any reason, you can approach Canara Bank for the balance transfer facility under Canara Bank home loan.
Who can avail Canara Bank Home Loans?
The Canara Bank home loan is available for Salaried as well as self-employed whether professionally qualified or engaged in business. A salaried person needs to have a minimum experience of three years but for self-employed, you should be in the business or profession for a minimum period of three years before making an application for the home loan to Canara bank.
Moreover, the age of the borrower should not be more than 60 years at the time of making the home loan application. The loan taken from Canara Bank has to be fully paid by the time borrower turns 70 years of age.
Canara Bank Home Loan Eligibility
Canara bank grants home loan up to four times of the annual income of the borrower. The income taken for this purpose is not your Cost to the Company (CTC) but the income under the head Salaries as per the ITR or income tax assessment order. For self-employed, the loan eligibility is four times of the average of gross income on the basis of the satisfactory document produced. In exceptional circumstances, however, Canara Bank lends even up to 5 times of annual income if the potentials of growth in salary or profit are property explained with documentary evidence and trend.
For buying a house the lenders lend only a certain percentage of the cost of the property and the balance, known as margin money, has to be funded by the borrower himself.
While determining the proportion of the cost of the house which the bank will finance, Canara Bank differentiates between new house and old house. For home loan up to Rs. 30 lakhs, for a new house, Canara bank lends up to 90% of the cost if the house is new and lends up to 80% for the house which is not older than 10 years. For loan amount above 30 lakhs but below 75 lakhs for a new house, the bank lends up to 80% for a new house as well as a house which is not older than 10 years. For houses older than 10 years, the bank only lends 75% of the cost of the house for loan amount up to 75 lakhs. For all the home loan over 75 lakhs, the bank lends only up to 75% of the cost of the house irrespective of the age of the house being purchased.
For home loans for the purpose of repair, renovation, extension the Canara Bank finances only up to 75% of the cost and the balance is to be funded by the borrower.
Canara Bank Home Loan Tenure
The Canara Bank grants home loan repayable over a period up to 30 years. The ultimate tenure for which the borrower will get a home loan would depend on the age of the borrower, whether he is salaried or self-employed and age of the property being purchased in case a second-hand house is being financed. For salaried whose retirement age is normally taken to be 60 years will get a tenure so that the loan gets fully repaid before the superannuation of the applicant. For self-employed who generally work beyond 60 years, the tenure is extended till they turn 65 to 70 years of age.
In case of second-hand property the bank normally gets the technical evaluation of the property being purchased to assess the balance life of the property. The maximum home loan tenure in case of such property will not be more than the balance life of the property as per the technical evaluation.
Canara Bank Home Loan Documents Required
For getting a home loan from Canara bank the applicant has to submit an application form with two photographs. The applicant also has to submit basic KYC documents for identity and address proof. Salaried have to submit the copy of form No. 16 and salary slips. The self-employed have to submit copies of their ITR and Profits & loss account with balance sheets for past two years.
In addition to the KYC and income documents the applicant also has to submit documents of property to be purchased like draft sale deed, NOC from the authority which registers the transfer to the ownership like Housing Society, Development Authority like DDA, MHADA etc. In case of a composite loan or self-construction loan, the estimates from architect/civil engineer are also required to be submitted before the home loan is granted.
Canara Bank Home Loan Interest Rates
The lending rate of Canara Bank is linked to the one-year Marginal cost of fund based lending rate (MCLR), which presently is 8.45%. The rate of interest charged depend on the amount of loan. For women home loan borrower the Canara Bank gives a discount of 0.05% on interest as compared to a male borrower. Interest rates of home loan presently range between MCLR+ (0.10% to 0.75%) for house purchase. However, for home improvement loan the rate of interest charged is 2.45% above MCLR