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Home Loan Interview Questions & Answers - Learning Mode

Home Loan Interview Questions & Answers - Learning Mode

Home Loan is offered to individuals who wish to purchase or construct a house. The property is mortgaged to the lender as a security till the repayment of the loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it. Home loan eligibility is determined by various factors such as income, employment status, tenure and so on. Home Loan is a sum of money borrowed from a financial institution or bank to purchase a house. Home loans consist of an adjustable or fixed interest rate and payment terms.

Try Home Loan Interview Questions & Answers - Exam Mode

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Home Loan Interview Questions & Answers - Learning Mode
Try Home Loan Interview Questions & Answers - Exam Mode
Question: Once I have closed my home loan, how do I check if my CIBIl score has been updated?

Answer: After closing your home loan or any loan for that matter, request your bank to inform CIBIL about your successful loan closure. The bank usually informs CIBIL once a month for all loan closures. The bank will inform you once they have shared the details with CIBIL and you can check your credit score to confirm. Any improvement in your credit score is a reflection that the bank has shared your successful loan closure details with the CIBIL. Source:
Question: I am planning to stand guarantor for my nephew?s home loan but i find some clauses really one sided and unfair. Can i bargain with the bank?

Answer: If you find any clause of the bank unacceptable, talk with the bank and the borrowers before signing the guarantor agreement with the bank. Yes you can discuss the clauses you find unfair with the bank. Sign up as a guarantor only after you are fully convinced and after seeking legal advice.

Hope you are aware that any default on the loan on which you stand as a guarantor will reflect in your credit score poorly. Source:
Question: Why is it a disadvantage to go for a home loan after 50?

Answer: When you opt for a home loan after you have crossed 50 years, you may only get a shorted tenure as banks are reluctant to offer loan where the tenure ranges into an age where the borrower is not working. So if at 50 you opt for a home loan, the maximum loan tenure you may possibly get is between 10 to 15 years at best or even lower. Source:
Question: If the home loan is rejected due to any reason, is the processing fee refunded?

Answer: Unless otherwise specified in writing the processing fee charged by banks for home loan is usually non refundable. Even if your loan application does not go through the approval process, the loan processing fee which is usually between 0.25 to 1% of the loan amount is non refundable. If your bank promises a refund of loan processing fee in case of loan rejection, make sure to take it in writing from the bank concerned. Source:
Question: Do top up loans come with any tax deductions?

Answer: You will get a tax advantage for a top up loan only if you use the loan amount exclusively for repair, renovation and construction activity of the home. Under section 24 of the income tax act, top up home loans are liable for tax benefits on interest paid during the financial year and not on the principal amount. You do not get a tax benefit if you use funds from a top up loan for any other use. Source:
Question: Who decides the maximum LTV for home loan? The bank or RBI?

Answer: Banks decide the maximum LTV they will offer to a loan applicant as per the RBI guidelines. As the current RBI guidelines for LTV on home loans, the LTV ceilings are divided as per the quantum of home loan sought. If the cost of the property is between 0 to Rs. 30 Lakhs the maximum stipulated LTV is 90%, the LTV for property prices between Rs. 30 Lakhs to Rs. 75 Lakhs is 80% and for property prices higher than Rs. 75 Lakhs you can get a maximum LTV of 75%. Source:
Question: What is the validity period of a pre approved home loan?

Answer: Usually pre approved home loans come with a validity period ranging from 2 months to 6 months depending on the bank concerned. This means once your pre approved home loan is approved you must shortlist your property within that time period and apply for a loan. Remember a pre approved loan does not come with a guarantee that you will get a home loan when you apply for one. Also if there is any change of interest rate during this period like changes in bank base rate it may impact the final loan Source:
Question: Can you please explain what a top up loan it is and will it be helpful for me?

Answer: A home loan top-up is nothing but additional loan against the same property which is already mortgaged with your loan provider. Suppose you are running a Home Loan with outstanding balance of Rs. 20 lacs against a property whose market value is Rs.60 lacs. Now, if you are in need of additional Rs.10 lacs, you can simply approach your financier and apply for additional top-up of Rs.10 lacs. When this loan amount gets approved, you will have a total loan of Rs.30 lacs against the same property of Source:
Question: I am looking to buy a plot but not start construction for now. Will a land loan be a good idea?

Answer: Land loans are available in both cases whether you are looking to construct a residential home on the plot or simply buy it as a future investment. Land loans however offer a maximum loan of up to 70% of the cost of the plot in urban centers. Land loans do not offer income tax deductions on interest paid for the land purchase loan unlike home loans. So pick your options wisely. Source:
Question: For a home loan transfer do I first take NOC from existing bank or first apply for the loan with the new bank?

Answer: If you are certain that you need to opt for a home loan transfer, you need to submit a letter of request with your current bank. As per your request the bank will offer you its consent letter, known as a NOC. Only once you have the consent letter or NOC, you can apply for a loan with your new preferred bank with your income documents and copies of property documents. Source:
Question: I have a slightly lower credit score. I need to opt for a home loan. Does reducing my LTV increase my loan chances?

Answer: When you have a low credit score, banks will generally offer you a lower quantum of loan compared to someone with a healthy credit score. So for example if you are looking for a home loan, someone with a credit score of 750 plus may get up 80-90% LTV, while you may at best get only 60-65% LTV for the loan. Source:
Question: Are fixed rates for home loans fixed for the entire tenure?

Answer: The so called fixed rate home loans are at best semi fixed as banks and NBFC?s offering such a loan have a clause allowing them to re-evaluate and fix the rate of interest afresh after a certain period. This period may range from as early as two years into your loan depending on the bank or NBFC. Therefore before taking up a fixed rate interest loan, make sure to check with your bank about the time after which the bank is likely to re-fix the interest rate for the loan. Source:
Question: Do joint home loan applicants get a lower interest rate compared to individual applicants?

Answer: Your bargaining capacity with the bank or the non banking financial company offering you a home loan goes high when you opt for a joint home loan. With a joint loan, the overall repayment capacity goes high allowing you to leverage it against a lower interest rate or other discounts with the banks. Banks and NBFCs are more than happy to facilitate discounted interest rates for genuine buyers with a good repayment capacity. Source:
Question: Do bank home loans cover the cost of expenses like stamp duty and registration charges?

Answer: Banks usually do not take into account the money spent for any statutory expense like stamp duty or registration charges, any VAT or service tax. Banks provide loans only up to 80-85% of the total cost of the property only and as per the agreement / market value, and this is excluding stamp duty and registration charges.

Although some public sector banks offer certain schemes from time to time supporting such a facility for a limited number of people like government employees, professiona Source:
Question: If I take up a home loan today and my property price escalates over the next 3-4 years, will it help me get a higher loan as possible top up loan?

Answer: No, the price of your property will not play a role when you opt for a top up loan. Banks offer top up loans only in accordance with the amount of money which is reduced by your outstanding amount of the home loan through repayment. If the property price escalates or the property witnesses an increase in price index, the quantum of top up loan is not increased by the bank. Source:
Question: What?s the reasoning behind banks charging a legal fee for home loans?

Answer: Once you submit your property documents with the bank, the bank has to undergo a process to get the documents verify legally. Banks have a team of legal experts who verify the submitted documents for each loan applicant. A lawyer usually checks the past record of the property and whether all submitted documents are correct or not to rule out any fraud. Since banks need to pay the legal team for their efforts, they charge a legal fee from the loan applicant. In case you are seeking a property whi Source:
Question: I need to opt for a home loan but I am confused between which interest rate to choose. Should I go in for a fixed or floating interest rate?

Answer: Fixed versus floating is a dilemma almost all home loan borrowers face. It all depends n your financial plan and repayment preference. For example if you opt for a fixed interest rate, it provides you with a fixed EMI for the entire tenure of the loan. In such a scenario you can work out your loan EMI and other expenses without having to worry about any changes in EMI over time. On the other hand for floating interest rate loans, EMIs for the loan increase or decrease as per the prevailing econo Source:
Question: How do banks value an under construction property for home loan approval? How can they fix a price when the home is still under construction?

Answer: For getting the exact valuation for an under construction property bank realty experts check the quality of construction as well as layout of flats ensuring that the construction is done as per granted permissions. The property is ranked in comparison with other property options in the area and builder credibility. Source:
Question: Is it good to transfer my home loan to another bank as the interest rates have reduced?

Answer: Home loan is like a long term financial obligation. Any small rise of fall in the interest rates is therefore part a home loan plan. Unless the interest rates drop more than 0.75 to 1% from your prevailing interest rate, even considering a home loan refinance is a big no. Source:
Question: While opting for a home loan, should I just choose the one offering me the lowest rate of interest? Is it a good way to choose the right home loan?

Answer: No. Most home loan borrowers often think on the same lines. So you are not the only one facing this dilemma.

A cheaper home loan is always a good option as home loan is a long term commitment. But before selecting a home loan, one must consider the full home loan in totality and not just the rate of interest. Processing fee, foreclosure charges and other hidden charges can also make a big difference in the overall financial impact of a home loan. The service of the bank / NBFC also matter Source:

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