Trouble getting a home loan?

My father is a salaried employee. 

He had applied for a loan for buying the apartment where we currently reside in. This was a company leased apartment but the company is not renewing its lease.

The landlord too is eager to sell it.

My dad applied for a bank loan but the bank refused to give one because the remaining period of his service is less than five years (60 months). 

He had no other options but to take a personal loan from the bank and buy the flat. 

My questions are:

1. Will he get any income tax benefit on the above loan?

2. If Income Tax authority asked for a letter from the bank that the money from the personal loan has been utilised for purchase of the flat, is the bank supposed to issue the letter?

- Mandal

Section 24 speaks of the deduction for interest payable on a loan taken to acquire/ construct a property. It does not require the loan be secured against the property to be eligible for a deduction under that section.

• A personal loan to buy a home?

However, where the property is self-occupied, it does require a certificate from the lender regarding the interest payable on such a loan as well as the fact that the loan has been used to acquire/ construct the property.

Most banks will provide your father a certificate for the interest payable by him.

• Can't get a home loan?

As far as stating the purpose of the loan, again most banks would provide a certificate stating that, as per the declaration received from the borrower, the loan has been used for the purpose of acquisition of property.

Your dad's bank should also be in a position to provide such a certificate.

• Home loans: Increase EMI or tenure?

Is it possible to get a home loan for a share of the house?

My brother and mother have some money that I can use for purchasing a home. But to cover the total cost of the intended house, I need to borrow.

Is it possible to have them as co-owners without making them co-applicants in the loan (co-borrowers)?

Since I am the only one who is going to repay the loan and avail of tax benefits I would like the loan only on my name. I am willing to give an undertaking / affidavit to that extent.

- Binota Bhattacharjee

No bank will agree to provide a loan where all the co-owners are not co-borrowers.

The reason is pretty simple. In the event of a default by the main borrower, the bank will be unable to proceed against the property as the co-owners will create issues for the bank in selling the property.

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