Additional Reading Material on Home Loans | Lender’s Appraisal Procedure | Module D: Wealth Management

By -
Home Loans: Appraisal, Documentation, Monitoring & Fraud | Bank Theory

Additional Reading Material on Home Loans

Additional Reading Material on Home Loans | Lender’s Appraisal Procedure | Module D: Wealth Management

Lender’s Appraisal Procedure

The lender's appraisal procedure ensures that a borrower's request for a home loan is viable and secured. This includes evaluating repayment capacity, the property's legality, market value, and documentation compliance.

Application Form

The borrower submits a loan application with personal, income, and property details.

Documents to be Submitted

  • Identity proof and address proof
  • Income proof (Salary slips, ITRs)
  • Bank statements
  • Title deed of property
  • Property valuation and legal reports

Loan Application Received Through Agent

Applications sourced by agents require additional due diligence to prevent misrepresentation or fraud.

Appraisal of Loan Request

This involves evaluating:

  • Income and repayment capacity (DSCR, EMI/NMI ratio)
  • Loan-to-value (LTV) ratio
  • Past credit behavior (CIBIL report)

Other Relevant Pre-sanction Issues

  • Verification of employment
  • Site visits
  • Verification of property documents through advocates

Documentation and Mortgage

Documents must be executed, stamped, and registered. Equitable or registered mortgage is created for the bank's security.

Registration of Documents

Documents such as sale deeds must be registered with the sub-registrar's office to ensure legal enforceability.

Detection of Forged or Fabricated Title Deeds

Legal opinion and search reports from advocates help detect forgery. Banks use forensic tools and title trace reports to validate documents.

Other Securities

Additional securities may include life insurance, fixed deposits, or guarantor support to enhance loan security.

Registration of Charges with CERSAI

The Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI) is used to record charges against properties to prevent multiple financing of the same asset.

Monitoring and Closure

Loan accounts are monitored for repayment regularity, end-use of funds, and proper insurance coverage. Closure involves releasing security documents upon full repayment.

Home Loan Frauds

Common frauds include fabrication of income documents, fake title deeds, overvaluation, and identity theft. Banks must use robust verification, digital tools, and CERSAI checks to prevent them.

Mathematical Examples (Medium-Hard)

  1. EMI Calculation: Loan = ₹30,00,000, Rate = 8.5% p.a., Tenure = 20 years.
    EMI = ₹26,035 approx.
  2. LTV Ratio: Property value = ₹50,00,000, Loan = ₹35,00,000.
    LTV = 70%
  3. Interest Outgo in 1st Year: EMI = ₹25,000, Total annual EMI = ₹3,00,000, Principal repaid = ₹50,000.
    Interest paid = ₹2,50,000
  4. Prepayment Benefit: Prepay ₹5,00,000 after 5 years, EMI = ₹30,000, Tenure = 20 years.
    Tenure reduces by approx. 6 years.
  5. Eligibility Calculation: Monthly income = ₹60,000, Max EMI = 40% → ₹24,000. For 20-year loan @ 9%, eligible loan = ₹27,60,000.
  6. Document Registration Charges: Stamp duty = 5%, Registration = 1%, Property value = ₹45,00,000.
    Total = ₹2,70,000 + ₹45,000 = ₹3,15,000
  7. Cost of Delayed EMI: EMI = ₹30,000, Delayed by 2 months, Penal interest @ 2% p.m.
    Penalty = ₹1,200
  8. Loan Top-up Calculation: Original loan = ₹20,00,000, Outstanding = ₹12,00,000, Property value = ₹40,00,000, LTV limit = 75%.
    Max permissible = ₹30,00,000, Additional = ₹18,00,000 (less outstanding) = ₹6,00,000
  9. CERSAI Charge Cost: Registration fee = ₹100 for loan < ₹5 lakh, ₹500 otherwise. Loan = ₹7 lakh → CERSAI fee = ₹500.
  10. Fraud Loss Estimation: Fake property financed for ₹35,00,000, resale value = ₹18,00,000.
    Loss = ₹17,00,000

MCQs (Medium Level) – Home Loans

  1. Which ratio is most relevant to assess the borrower’s repayment capacity?
    A. Loan to Value
    B. Debt Service Coverage Ratio
    C. Gross Profit Margin
    D. Interest Coverage Ratio
    Answer: B
  2. Which document legally transfers the title of property?
    A. Agreement to Sell
    B. Sale Deed
    C. Allotment Letter
    D. Encumbrance Certificate
    Answer: B
  3. Registration of charges with CERSAI is done to:
    A. Avoid legal suits
    B. Prevent multiple lending on same asset
    C. Enhance credit score
    D. Maintain customer details
    Answer: B
  4. Which of the following is NOT a typical security in a home loan?
    A. Title Deed
    B. Registered Mortgage
    C. Fixed Deposit Lien
    D. Credit Card
    Answer: D
  5. In case of loan through agent, what additional care is needed?
    A. More EMI
    B. Lower interest
    C. Enhanced due diligence
    D. Less documents
    Answer: C
  6. Equitable mortgage is created by:
    A. Executing an agreement
    B. Depositing title deeds with intent
    C. Registering with municipality
    D. Attaching insurance
    Answer: B
  7. Which system helps detect multiple encumbrances on a property?
    A. SWIFT
    B. UIDAI
    C. CIBIL
    D. CERSAI
    Answer: D
  8. Forgery of documents can be detected using:
    A. CIBIL
    B. GPS
    C. Legal and title reports
    D. Income tax records
    Answer: C
  9. Penalty for delayed EMI is usually calculated:
    A. On loan amount
    B. On EMI due
    C. On principal repaid
    D. On prepayment
    Answer: B
  10. Which of these is a post-disbursement activity?
    A. Verification of income
    B. Sanction letter issue
    C. Property document scrutiny
    D. Monitoring of loan use
    Answer: D

Comments

Post a Comment

Popular Posts

JEXPO 2014 new syllabus | application notice | online application form

By -
JEXPO 2014 Online Application form , Online application for the JEXPO 2014 will be started from 24/01/2014 to 28/02/2014 . But no online application. Only offline application form are available.  New syllabus will be introduced from 2014 JEXPO examination. JEXPO is an Examination for admission in Different polytechnic college in West Bengal. This examination is conducted by the West Bengal State Council of Technical Education . Council announced a news about JEXPO 2014 syllabus . They announced that from 2014 new syllabus will be introduced. But till date I have no copy of the new syllabus. After getting a copy of new syllabus I shall publish it on this page. I hope I shall get it within September, 2013. Notice about JEXPO 2014 will be published after the Durga Puja Vacation . JEXPO 2014 application should be got through Online process, because this year (2013) Council introduced online counselling process and it was successfully completed. Time to time I shall p...
Read more

Upper Primary TET Result 2016 West Bengali School Service Comission

By -
Image
Upper Primary TET Result 2016   West Bengal School Service Commission published Upper Primary TET Result on 14/09/2016. This year total 22000 (+-5%) upper primary teacher (Class V to VIII) will be selected through this result and the previous TET result . Get your result directly from the link provided below. Upper Primary Result Published on 14/09/2016. Date of interview will announced in short . Direct Download Link: Get your result directly from Commission website. Direct Download Link Indirect Download UPPER PRIMARY TET INTERVIEW PROCEDURE Notice Date 22/09/2016 Other Result 2016: Calcutta University B.A BSC B.COM Part III Result West Bengal SSC LDA LDC Result
Read more

WBCS preliminary answer 2013 part 2

By -
WBCS Preliminary Examination 2013 | WBCS Preli previous year questions and answers Full marks: 200 | Time:2 H 30 M | Date of Examination: April 7,2013 Q26. In his insrptions, Ashoka calls himself a) Priyadarshi     b) Dhammasoka c) Davaputra     d) Devabampriya Priyadarsin Answer d) Devabampriya Priyadarsin Q27. Share of the sector in India's GDP is highest. a) Agricultural Sector     b) Industrial sector c) Service Sector     d) Foreign Trade Sector Answer c) Service Sector (56.4% in the year 2011) Q28. Where did Bhil revolt take place? a) Chhotonagpur     b) Singbhum c) Satara     d) Khandesh Answer a) Chhotonagpur (Satpura,Satmala,Ajanta etc.) Q29. Find the missing term of the series : 24,25,27,?,39,55 a) 29     b) 31 c) 33     d) 35 Answer b) 31 (24+1=25, 25+2=27,27+4=31,31+8=39,39+16=55) Q30. Who introduced Kaulinya system in Bengal? a) Gopal   ...
Read more