Trouble getting a home loan?

I have been working in China for a few years. Last year I decided to buy an apartment in India. I identified the property and applied for a home loan from Standard Chartered Bank in September.

The agent assured me that I would get the loan. So I came to India in February to complete all the formalities.

The agent then told me that the procedure was delayed and later informed me that I could not get it.

My colleague, who earns less than me and does not even have an NRE account in India, got a loan from the same agent. He told me that he bribed the agent (around 1% to 2% of the loan amount).

I have already paid an advance of Rs 5,00,000 to the builder and have returned to China.

I am in deep trouble. What must I do?

- Sunil

The home loan scenario is very competitive with various banks vying with each other to provide home loans.

If your income papers are in order and the property is legal than I cannot see any reason why there should be any requirement for any underhand dealings with the agents of any bank.

• Got a home loan? Check the tax implication

I am an IT professional who freelances for clients abroad. I have been doing this for the past two years. Right now I am looking for a home of around Rs 10 lakh (Rs 1 million).

Problem I: The perception of the people.

Banks prefer giving loans to salaried individuals even though they earn much less than I do. Loan executives seem to be skeptical when I tell them I am a freelance IT professional.

Problem II: Lack of a regular income

I did not have a regular source of income before January 2005. My work picked up after that.

My income in the last financial year was around Rs 1,00,000. This year, it should be a little more than Rs 3,00,000. I expect it to be even higher the following year. 

My bank account has the details of all this income. What are my options? Do you think I can get a home loan?

- Deepak Khanna

This is a very interesting problem that is becoming more widespread as more people turn entrepreneurial. Here are my suggestions.

1. I think part of the problem is in the manner of presentation. Present yourself as a business (whose proprietor you are) rather than as a free-lance consultant. 

2. File your return for the financial year 2005-06 immediately rather than wait till July 31, 2006. Based on this return you can approach a public sector bank. Most of them base their eligibility calculations on the income tax returns. This should enable you to qualify for the Rs 1 million loan that you are looking for.

3. The best bet is to approach the bank in which you presently have a bank account. If that does not work out, then approach a nationalised bank active in your area.

• Problems with your home loan?

My home loan has been sanctioned from a reputed Indian bank. When I went for my disbursal, they told me to submit the following original documents.

1. Agreement Letter from Builder
2. Initial Payment receipt

When I asked them to give me a letter stating I have submitted the above, they refused to give one immediately and told me that I would get it after a week to 10 days.

What if they do not send the letter? Then I have no proof of the documents being with them.

What do you suggest?

- Sunil Kumar

More power to aware consumers like you!

A good solution to your imbroglio is to make a covering letter while submitting the required documents.  In this letter, state the list of documents and enclosures.

Have the bank acknowledge receipt on the duplicate copy of this covering letter about receiving the latter as well as the enclosures mentioned there.

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