How is an EMI calculated?

EMI or Equated Monthly Installment is the amount payable to the lending institution every month, till the loan is paid back in full. It consists of a portion of the interest as well as the principal.

EMI Formula: l x r [(1+r)n /(1+r)n-1 ] x 1/12
(l = loan amount, r = rate of interest, n = term of the loan)

How does a housing finance company decide on the loan amount?

Most companies give a maximum of 85% of the cost of the house. The 15% (seed money) will have to be provided by the loan applicant. The amount, for which the applicant is eligible, is determined by the age, income, no. of dependents, monthly outgoing and repayment capacity.

Is there a right time to apply for a home loan?

Loans may be applied for before or after selection of property. The loan amounts are sanctioned in principle to let you know what amounts you can avail of. This helps you decide your budget. Actual disbursements are made after satisfactory verification of all necessary documents and completion of specific procedures.

What is the time required for loan application approval?

Within 15 days.

What documents should I verify before buying any property?

If you want to purchase a property, you must see the approved layout plan, approved building plan, ownership documents, carryout search, etc.

What is the difference between built up area, super built up area and carpet area?

Carpet Area: Area of the apartment/building, which does not include the area of the walls

Built up Area: Includes the area of the walls also

Super Built up Area: Includes the built up area, along with the area under common spaces such as the lobby, lifts, stairs, etc. This term is only applicable to multi-dwelling units

For investments in immovable properties: A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka, or Nepal), is deemed to be of Indian origin if,

  • He held an Indian passport at any time, or
  • He or his father or paternal grand-father was a citizen of India by virtue of the (Constitution of India or the Citizenship Act, 1955 (57 of 1955)

Who is liable to pay Stamp Duty - the buyer or the seller?

As stated by Section 30, of Bombay Stamp Act, 1958, liability of paying stamp duty is of the buyer unless there is an agreement to the contrary.

What is market value of a property?

Market value means the price at which a property could be bought in the open market on the date of execution of such instrument.

Is Stamp Duty payable on the market value or as stated in the agreement?

The Stamp Duty is payable on the agreement value of the property or the market value whichever is higher.

Which instruments attract payment of Stamp Duty?


The instruments that attract Stamp Duty on market value of the property are:

  • Agreement to Sell
  • Conveyance Deed
  • Exchange of property
  • Gift Deed
  • Partition Deed
  • Power of Attorney settlement and Deed
  • Transfer of lease