ADVANCES FOR HOUSING
1) Housing Loan should be sanctioned to individuals only by mortgaging the proposed construction site or land. The borrower shall have good dealings with the Bank.
2) The Borrower should produce the plan, estimation, property extract, sale deed if it is purchased by the borrower, encumbrance certificate, legal opinion, permission letter from local authority etc., along with loan application. In case of commercial complex or shopping centers, it is advisable to obtain project report. Housing loan may be advanced upto 75% of the estimation or the maximum limit sanctioned by the Board whichever is less.
3) The Bank should assess the credit worthiness, source of income, repaying capacity of the borrower before the sanction.
4) The property proposed to be mortgaged to the Bank for housing loan should be inspected by the Bank officer and evaluated by the competent person. Before disbursement of loan, the Bank should get the property mortgaged to the Bank with registering authority and an encumbrance certificate having entered the name of the Bank should be obtained.
5) The Mortgaged property should be insured in the Joint name of the Bank and the borrower and the insurance policy should be retained with the Bank.
6) The period of loan is as per the ‘Loan Policy’ approved by the Board. The Borrower should be informed about the repayment schedule, instalments, interest etc., The borrower shall be granted moratorium period subject to the guidelines issued by RBI from time to time.
7) The Housing loan should be disbursed in four equal instalments, as detailed in Bank’s ‘Loan Policy’.
8) Documents : The borrower should execute the following documents along with loan application i) Demand Promissory Note ii) Property Extract ( 2 copies) Original Sale Deed iii) Encumbrance Certificate iv) Plan and estimation by the competent person (Civil Engineer) v) Permission from Local authority vi) Agreement vii) Contiuning security letter viii) Legal opinion. ix) Income and Expenditure statement of borrowers x) PAN card copy and audited Balance Sheet and Profit and Loss account.
9) In case of default in payment of instalment/interest within prescribed time, the Bank shall initiate legal procedure for recovery after a notice is served on borrower and guarantor.