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Here are the ways in which you can leverage your property to fund your goals.
1) Loan against rent receivables This loan is taken against the future rental income of a residential or commercial property.
LOAN AMOUNT: 55-85% of the receivable rent for the residual lease tenure, subject to a maximum limit, usually Rs 10 crore. TENURE: Maximum of 10 years or residual lease period, whichever is lesser. RATE: 11.75-14.5% PROCESSING FEE: 1-2% of loan amount.
2) Top-up loan This loan is taken in addition to an existing home loan.
LOAN AMOUNT: Equivalent to originally sanctioned home loan, subject to a maximum limit, which varies for banks. It can also be calculated as percentage of the market value of property, minus the outstanding home loan. TENURE: Up to 20 years; can also be linked to original home loan. RATE: 50-200 basis points more than your existing home loan rate. PROCESSING FEE: 0.35-1% of loan amount.
3) Home equity loan Such a loan allows you to borrow against the value of your residential or commercial property.
LOAN AMOUNT: 50-65% of the current property value. TENURE: Up to 15 years. RATE: 11.5-15.5% PROCESSING FEE: 0.5-1.5% of loan amount.
4) Overdraft against property This option lets you take an overdraft against your property.
LOAN AMOUNT: Up to 65% of the value of the property, subject to a maximum limit. TENURE :
Up to 10 years. RATE: 12-14% PROCESSING FEE: Up to 1% of loan amount.
5) Reverse mortgage The property owner can borrow against his home equity and get regular monthly payments or a lump sum.
LOAN AMOUNT: 45-65% of the current value of the property, subject to a maximum limit. TENURE: 15-20 years RATE: 11-13% PROCESSING FEE: 0.25-0.5%
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