SBI Housing Loan becomes the most demanding home loan across the banking sector in India and you will never regret if you have taken housing loan from State Bank Of India. Other banks have very attractive offers for housing loan, once you have availed one of those home loans, there will be a day that you realize "I could have at least gone through the details of SBI housing loan".
There is a saying among the home loan takers "Upto loan sanctioning, other banks are good; after sanctioning, SBI is good". It is really true when hidden charges and penalties come into force during the repayment period of other banks. Here we look into the features, eligibility requirements, loan amount disbursementt, documents required, etc. of SBI Home Loan. You may read SBI Home Loan FAQ for clarification related to this financial product.
SBI Housing Loan Features
Purpose of SBI Housing Loan
- Purchase a plot of land for purpose of construction of house
- Purchase / construct a new house / flat
- Purchase an existing (old) house / flat or extend an existing house
- Repair or renovate an existing house / flat
- Furnishings / consumer durables as part of the project cost
- Reimbursement of investment made from own resources during the preceding twelve months for purchase /construction /repairs /extension of house
Loans for more than one house may be granted to an individual provided he / she fulfils the income criteria as also EMI/NMI ratio after netting off the repayment obligations of the existing loans and subject to satisfactory conduct of existing loan(s) for a minimum period of one year.
Takeover of SBI Home Loans availed by an individual borrower from other banks / financial institutions may be considered under certain circumstances after strictly following the procedure laid down.
Eligibility for SBI Home Loan
- Minimum age: Individual(s) over 18 years of age with steady source of income, including persons engaged in agriculture & allied activities.
- Maximum Age: Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the loan should be fully repaid, subject to availability of sufficient, regular and continuous source of income for servicing the loan repayment. Sanctioning authority is, however, left with discretion to sanction loans to individuals above the age of 70 years, provided son / daughter / spouse, who is a legal heir and below the age of 50 years, with sufficient income for servicing the loan repayment, joins as co-borrower / guarantor. Loan repayment in such cases should be made through a joint deposit account / current account in the names of all the joint borrowers / guarantors.
- No. of Co-Borrower: Restricted to maximum 3 including spouse/children/parents/siblings. However, AGM [Region] / AGM (Branch) can relax maximum no of co borrowers provided the property is registered in the joint names of all the borrowers and loan repayment is made through an account with us in the joint names of all the borrowers.
SBI Home Loan Amount: Actual loan amount will be determined taking into consideration such factors as applicant's income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat etc. To enhance loan eligibility you have option to add:
- Income of your spouse / your son / daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI.
- Expected rent accruals (less taxes, cess, etc.) if the house / flat being purchased is proposed to be rented out.
- Depreciation, subject to some conditions.
- Regular income from all sources.
Security for SBI Home Loan
Equitable mortgage of the property
Margin / LTV Ratio
- Loan Amount Upto Rs. 20 Lacs: 10% (minimum margin) / 90% (Maximum LTV ratio)
- Loan Amount Above Rs. 20 Lacs: 20% (minimum margin) / 80% (Maximum LTV ratio)
Repayment period for SBI Home Loan: Maximum 25 years (or) Up to the age of 70 years (the age by which the loan should be fully repaid) of the borrower, whichever is early.
Moratorium period for SBI Home Loan (Repayment holiday): The moratorium period is included within the maximum repayment period.
SBI Housing Loan Rate of Interest
Floating Rate of Interest:
Interest on the loan will be charged at prevailing floating rate of interest on a daily reducing balance at monthly rests. The rate of interest is subject to revision from time to time due to (i) changes in Base Rate or (ii) revision even without change in Base Rate the Bank has the option to reduce or increase the EMI or extend the repayment period or both consequent upon revision in interest rate.
Fixed Rate of Interest:
Interest on the loan will be charged at the prevailing fixed rate of interest on daily reducing balance at monthly rests, subject to interest rate reset at the end of every two years on the basis of fixed interest rates prevailing then. State Bank of India (SBI) may at its discretion stipulate the periodicity of computation of interest. Further, SBI may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement. Thenceforth the rate of interest varied as aforesaid shall be applicable to the Loan. SBI shall be the sole judge to determine whether such condition exists or not. If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower can request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the loan and the Borrower shall repay the Loan and any other amount due to SBI in full and final settlement in accordance with the provisions of the Agreement relating to pre-closure.
SBI Housing Loan Calculation of interest
Interest on the amount of the loan will be applied at the prevailing rate per annum on daily reducing balance with monthly rests.
SBI Housing Loan - Intimation of change in Interest Rate
The borrower shall be deemed to have notice of changes in the rate of interest whenever there are changes in Base Rate or increase in interest rates where there is no change in Base Rate are either displayed on the Notice Board of the Branch or published in news papers or made through entries of the interest rate charged in the passbook/statement of account furnished to the borrower and the borrower is liable to pay such revised rate of interest.
Penal Interest of SBI Housing Loan
In the event of a default in payment or any irregularity in the account, the Bank reserves the right to levy a higher rate of interest as it deems fit. Enhanced rate of interest @2% p.a on the irregular amount for the period of irregularity, over and above the applicable rate will be charged if the Equated Monthly Instalment (EMI) remains unpaid for a period of 30 days from the due date, for any reason, including a bounced cheque.
SBI Housing Loan Bounced cheque/ECS or SI dishonours
A penalty of Rs 250/- will be charged for every bounced cheque/ECS or SI dishonours. The rate may vary from time to time.
SBI Housing Loan Repayment
The loan is to be repaid in Equated Monthly Instalments over the tenure of the loan. The repayment instalment commences (a) 2 months after completion of construction of house/flat or after eighteen months from disbursement of first instalment, where loan is released in instalments, whichever is earlier or (b) from the next month after the date of full disbursement in respect of outright purchase of land/house/flat/extension, repairs or renovation of an existing house/flat. The liability to the bank will be extinguished only when the outstanding in the loan account becomes Nil, on payment of residual amount, if any.
SBI Housing Loan Tenor
Maximum 25 years (or) up to the age of 70 years (the age by which the loan should be fully repaid) of the borrower, whichever is early.
SBI Housing Loan Pre-closure Charges
Loans on Fixed and Floating rate of interest: Pre-closure charge of 2% of the amount pre-paid in excess of normal EMI dues will be levied in case of pre-closure of loan within 3 years from the stipulated date of commencement of repayment. If the loan is pre-closed from own resources other than borrowings, for which proof is submitted to the satisfaction of the Bank, pre-closure charges shall not be levied irrespective of the period for which the loan account has run. There is Home Loan FAQ section for more about pre-closure charges.
Security for SBI Housing Loan
Primary: The loan will be secured by Equitable / Registered mortgage/extension of mortgage of the land and building/flat for which the loan is to be sanctioned.
Collateral: If mortgage of the property being financed is not possible, Bank may accept, at it discretion, security of adequate value in the form of Life Insurance policies, Government Promissory Notes, shares/ debentures, gold ornaments or such other tangible security as may be deemed appropriate.
Interim Security Pending Mortgage: Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security including third party guarantee, as considered necessary, may be taken for the interim period.
Utilisation of the SBI Housing Loan
The amount of the loan shall be utilized strictly for the purpose detailed in the borrower’s application form and in the manner prescribed. The construction of the house/flat or the modification/extension proposed by the borrower in the existing house/flat should be strictly according to the plan approved by the Local Authorities/Town Planning and Development authorities. Any modification desired in the plan as originally approved, can be undertaken only after express sanction for it has been obtained from the appropriate authority.
Insurance for SBI Housing Loan
The house/flat shall be insured comprehensively for the market value covering fire, flood, Earthquake etc. in the joint names of the Bank and the borrower. Cost of the same shall be borne by the borrower.
Inspection of the SBI Housing Loan Utilization
The Bank will have the right to inspect, at all reasonable times, the borrower’s property by an officer of the Bank or a qualified auditor or a technical expert as decided by the Bank and the cost thereof shall be borne by the customer.
Fees and charges for SBI Housing Loan
- SBI Housing Processing fee: Is to be paid upfront at rates laid down by the Bank from time to time. Entire processing fee would be refunded if application is rejected after initial scrutiny. If loan application is rejected after site inspection and/or obtention of legal/valuation report, 75% of the processing fee will be reimbursed. No refund of processing fee is permissible in case of sanction/rejection by sanctioning authority.
SBI Housing Loan Amount and Processing Fee shall be as follows:
Upto Rs.5 Lac - Rs.1000/-
Above Rs.5 Lac and upto Rs.10 Lac - Rs.2000/-
Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/-
Above Rs.20 Lac and upto Rs.50 Lac Rs.7,000/-
Above Rs.50 Lac and upto Rs.1 Cr Rs.8,000/-
Above Rs.1 Cr and upto Rs.5 Cr Rs.10,000/-
Above Rs.5 Cr Rs.20,000/-
- SBI Housing Legal Fee*: Title of the property proposed to be purchased is to be clear, absolute, unencumbered and marketable to the satisfaction of the Bank’s solicitor/Advocate. Fee is to be paid for legal opinion to be obtained through a lawyer on the Bank’s panel. This fee is payable regardless of whether the clear title is established and whether the loan is sanctioned.
- SBI Housing Valuation fee*: The valuation of the land and building /flat will be done by the empaneled valuer of the bank and prescribed fee is payable by the borrower.
- All legal and other expenses, stamp duty, registration charges and other incidental expenses incurred in connection with the loan shall be borne by the borrower.
*Items 2 and 3 may vary from place to place and the rates will be intimated to the applicant by the branch/sourcing entity. Item 4 varies from State to State according to the local registration laws, Stamp Duty Act etc. and is payable to the State Govt.
State Bank of India retains the right to alter any charges or fees from time to time or to introduce any new charges or fees, as it may deem appropriate, with due intimation to customer.
- Conversion charges for switching loan from fixed to floating rate: Option for switching loan from fixed to floating rate or vice-versa is not available.
Fees and Charges are subject to change from time to time at the sole discretion of SBI.
SBI Housing Loan Disbursement
The loan will be disbursed only on the following conditions:
- All the security documents prescribed have been executed by borrower/co-applicant (s)/ guarantor/s
- A valid mortgage (equitable or registered if equitable mortgage is not possible) has been created in favour of the Bank as per the laws of the State.
- Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security including third party guarantee, has been taken for the interim period.
- The loan will be disbursed in stages where a loan for construction is desired or purchase is through payment to seller in instalments.
- All necessary statutory compliance are in place.
SBI may disburse the quantum of loan in lump sum or in instalments at its own discretion depending on the level of construction of the House/Flat as acceptable to SBI.
SBI will disburse loan amount directly to the builder/seller/society as the case may be and as requested / specified/ directed by the customer to SBI at the time of each disbursement. SBI shall not be responsible / liable in any manner whatsoever for any delay by the customer in providing such request/ specification/ direction to SBI and the customer shall not claim any costs, charges and expenses in any relation to any non-disbursal by SBI due to any such delay by the customer.
The Bank reserves the right to collect any tax if levied by the State/Central Government and/or other Authorities in respect of this transaction.
Default of SBI Housing Loan
In the event of default i.e. if the amount due is not paid by due date, the customer will be sent reminders from time to time for payment of any outstanding on his loan account, by post, fax, telephone, email, SMS messaging and/or through third parties appointed for collection purpose to remind, follow-up and collect dues. Any third party so appointed, shall adhere to the Indian Banks Association’s (IBA) code of conduct on debt collection.
SBI Housing Loan - Documents To Be Submitted
To avail Housing Loan from State Bank Of India (SBI), one has to submit the personal related documents and property related documents:
Personal Related Documents
List of papers/ documents applicable to all applicants:
- Completed SBI Home Loan application
- 3 Passport size photographs
- Proof of identify (photo copies of Voters ID card/ Passport / Driving license/ IT PAN card / Aadhaar)
- Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/Property tax receipt/ Passport/ Voters ID card)
- Proof of business address for non-salaried individuals
- Statement of Bank Account/ Pass Book for last six months
- Signature identification from present bankers
- Personal Assets and Liabilities statement
For guarantor (wherever applicable):
- Personal Assets and Liabilities Statement
- 2 passport size photographs
- Proof of identification as above
- Proof of residence as above
- Proof of business address as above
- Signature identification from his/her present bankers
Additional documents required for salaried persons:
- Original Salary Certificate from employer
- TDS certificate on Form 16 or copy of IT Returns for last 2 financial years, duly acknowledged by IT Deptt.
(*Relaxation may be permitted by AGM (Region) / AGM (RACPC) / AGM (Branch) in the case of salaried persons, provided sanctioning authority is satisfied about the genuineness of source, amount and continuity of income confirming repayment capacity of the borrower over the loan tenor. In all such cases basis for income verification should be properly recorded in the loan appraisal.)
Where check-off is proposed:
- Revocable letter of authority vide Annexure / HL-C
- Letter from employers vide Annexure / HL-D
- Irrevocable Letter of Authority where applicant himself is Drawing and Disbursing Officers vide Annexure / HLE
Additional documents required for Professionals/self- employed/ other IT assesses:
- Acknowledged copies of 3 years I.T. returns/ Assessment Orders.
- Photocopies of challans evidencing payment of Advance Income Tax.
(* photocopies to be kept for our records after verification of the originals with suitable noting regarding verification of the original by the official concerned)
DOCUMENTS TO BE SUBMITTED FOR SBI HOME LOAN (Property Related Documents)
Additional documents required when old property is being purchased:
- Valuation certificate from a Government approved valuer.
- Certificate from the Govt. approved architect/ structural engineer certifying the condition of the house/ flat.
- The condition of the house / flat should be such that the security cover for the Bank's loan remains unaffected till full repayment of the loan.
- Sale Deed, Agreement of Sale, Original share certificate(s) issued by the society.
- Copy of approved plan (wherever applicable) of proposed construction / purchase / extension
- Permission for construction (wherever applicable)
- Estimate / Valuation Report from approved valuers (Chartered Engineer / Architect) in respect of the property to be financed (wherever applicable)
- Land and Building tax paid receipts, possession certificate, location sketch of property certified by revenue authorities
- Letter of allotment from Housing Board/Society/Private Builder
- Original receipts of advance payments towards purchase of flat
- Search report / Non encumbrance certificate for the last 13 years from Bank's advocate.
- Original of land tax paid receipt and possession certificate issued by the revenue authorities.
- Original NOC under ULCR Act 1976
- Copy of the relative order in case of conversion of agricultural land
- Original No objection certificate [NOC] from Housing Society/Builder
- Detailed estimate of cost of construction of house
- Letter from the builder / society / Housing Board intimating their a/c number and name of their bankers, for remittance of instalments.
- Lawyer's report as per the standard format approved by the LHO concerned.
- Valuation report from empanelled valuer as per the standard format approved by the LHO concerned.
- Declaration by the borrower (as per Annexure-A, under SBI Realty) agreeing to construct the house within the stipulated period in case of loan granted for purchase of plot of land.
Authored by: Stanly Chirayath
Date and Time: Wed, 26/12/2012 - 12:26pm