Q. I plan to foreclose my home loan two years ahead of schedule. What is the procedure for this What are the documents that I should collect from the bank apart from the original sale deed
Q. I plan to foreclose my home loan two years ahead of schedule. What is the procedure for this What are the documents that I should collect from the bank apart from the original sale deed
Shravan Hyderabad
The bank will tell you a tentative amount that you need to pay at a future date. This amount will include the prepayment charge chargeable by your bank and will list the documents held by them that will be released on payment of the stated amount. This amount is typically calculated as on a future date to give you time to arrange money for the payment. After the payment of all dues, the bank will return your original documents and will issue a loan closure letter, which states that you don’t owe anything to the bank. Please make sure that you receive the no-dues certificate from the bank to obviate any issues in the future. If any insurance policy is hypothecated in favour of the lender, get a similar letter addressed to the insurer. Q. I am planning to apply for a home loan to construct a house in my home town. The land is in my brother’s name. Can I apply for a home loan by including my brother as co-applicant Prashant Rao Bengaluru
Since the property is in your brother's name, he will have to join you as the borrower and you can become the co-borrower/co-owner of the home loan. However, not many banks readily lend when a brother is the co-borrower, so your choice becomes limited to that extent. Another thing that has to be clarified is that if you are not the co-owner of the property, you will not be able to claim tax deduction benefits on the loan taken for the purpose of construction of the house.
Q. I have been investing in the HDFC Top 200 fund, for three years now. Please tell if I need to redeem it and invest the amount in PPF. Suraj Jain Hyderabad
You cannot compare equity with PPF investment. The PPF is a safe and secured return fund whereas equity is aggressive and a high-risk and high-return instrument. Equity MF investment should be made with a long-term view for at least 10 years plus. If you are young, you can afford to take that risk. The 10-year SIP in the Nifty since 1995 has given a minimum return of nine per cent a year and an average return of 17 per cent per annum. So, if your investment time horizon is more than 10 years, you can continue your SIP in equity. You should review your portfolio periodically. You should also invest some portion of your savings in PPF.
Q. Is this the right time to invest in PE-led real estate funds B. Krishna Vijayawada
The real question that you need to ask yourselves is whether you need to invest in real estate and if yes, how much exposure you need to take in the sector and how long you need to invest in it. If you decide to have exposure in real estate, investing through private equity real estate funds or through RIETs is a good way to have the size of your exposure managed properly rather than direct investment which tends to be lumpy and requires management time; also your investment is concentrated in a single asset rather than the diversification that you get when you invest in a RIET or a PE real estate fund.
The writer is the CEO of Apnapaisa.com. You can send in your queries to movingmoney@ deccanmail.com
