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  Housing Finance Scheme for Individuals.
    

  Nature of Facility

Term Loan.


  Purpose/       Types       of Constructions eligible for finance.

  • Residential houses/flats to be constructed/ purchased by the individuals.
  • Residential houses/flats to be constructed by public agencies like HUDCO, Housing Boards, Local Bodies, Co-operative Societies, Builders or Employers etc. for individuals.
    Note: In case of unfinished flats or houses, cost of completion/finishing of house/flats shall be considered as part of total project cost.
  • Residential  house /flat  to  be  constructed/purchased  by a person who is already owning  a house in the town/village where he resides acquired by availing housing loan from any    bank / FI or otherwise and intends to buy/construct a second house in the same or other town/village for the purpose of self- occupation.
  • Residential  house /flat  to  be  constructed/purchased  by a  person  who  intends  to  purchase/construct  a  house  and proposes to let it out on rental basis on account of his posting outside  the  headquarters or  because  he  has  been  provided accommodation by his employer.
  • Residential house / flat to be purchased by a person who    is presently residing as a tenant in that house / flat.
  • For purchase of a plot only, provided a declaration is obtained from the borrower that he will construct a house on the said plot, with the help of bank finance or otherwise, within a period of 2 years. Advance is not permitted against plots purchased on power of attorney basis
  • Supplementary finance in the shape of additional loan may be granted within the overall ceiling for carrying out alterations/ additions/repairs to the houses/flats already financed.
  • Finance   for   repairs   &   renovation   of   houses/flats   already constructed with own resources or with housing loan whether liquidated or outstanding
  • Housing loan can be sanctioned for purchase/construction of 2nd house.
  • Loan can be sanctioned for acquiring third and subsequent house too but such loans shall not be sanctioned under this scheme and are to be dealt as Exposure to Commercial Real Estate (CRE). 


  Eligibility

Individuals having perpetual source of income, who belong to any of the following categories:

  1. Permanent Employees of State / Central Government, Government / Semi-Government Undertakings & Autonomous Bodies.
  2. Employees of Reputed Companies with a minimum of 3 years of service
  3. Professionals, Self Employed Individuals / Businessmen with a minimum 3 years standing in the current profession.
  4. Persons engaged in agricultural and allied activities.
  5. Retired Employees of State / Central Government, Public Sector Undertaking.
    Non-Resident Indians are also eligible for financing under the scheme. Sanctioning authorities to satisfy themselves about the income earned by the Non-Resident and take necessary safeguards for extending finance and regular repayment of such loans.
  6. Others:
    In Case of repairs/renovation/alteration/additions to an ancestral property in the name of either father or mother, who is dependent on son / daughter, loan can be granted to the parent(s) by making the son / daughter as co borrower and his /her income can be taken for computation of quantum of loan. However, in all such cases mortgage of house shall be mandatory and all the legal heirs of the father/mother should stand as guarantors to the amount of housing loan. 


  Age of borrower

Minimum age: 18 years as on the date of sanction
Maximum age: 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.
In case quantum of loan is computed by adding the income of spouse / child(ren), the age of the youngest borrower / co-borrower can be considered for fixing the tenor of loan subject to the condition that his / her contribution towards the EMI is more than 50% 


  Maximum Quantum of Finance

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 following options may be added:

  1. Income of spouse and / or child(ren) living with applicant, provided:
    1. They have a steady income by way of salary and his/ her salary account is maintained with Bank (preferably J&K Bank).
    2. They are made co-borrowers i.e. loan to be sanctioned in joint names.
    3. They (optional for spouse) are the joint owners of the land/flat/house.
    4. Only residual income of spouse / son / daughter i.e. income net of all deductions including deductions towards servicing of already availed loans (if any) to be considered.
    5. The income proof documents of spouse / child(ren) as applicable / stipulated under scheme shall be obtained to verify their income

2. Expected rent accruals (less taxes, cess, etc.) if the house / flat being purchased is proposed to be rented out.
3. Depreciation, subject to some conditions.
4. Regular income from all sources.


Accordingly the loan amount shall be assessed as under:
i.       Loan  for  fresh  construction/purchase  of  house/flat:    Cost of construction / House / Flat less by stipulated margin.
ii.         For  State/Central  Govt  Pensioners:  36  times  of  the  net monthly pension subject to the condition that loan sanctioned shall be fully repaid by the time pensioner attains the age of 70 years and total deductions do not exceed 50% of their monthly income.

      1. Loan  for  carrying  out  repairs  /  renovations  /  additions  / alterations:  
          1. For carrying out repairs / renovations to the house / flat: Maximum  Rs.25.00  lacs
          2. For carrying out addition / alteration to house / flat which is not acquired by bank finance or where loan has been liquidated / adjusted: No cap on maximum loan amount subject to the condition that the addition / alteration is done after obtaining valid permission from competent authority / Municipality (BOCA)  

iii.         Purchase of land: Housing loan facility can be sanctioned for purchase of land/plot to be used for construction of house. The finance for purchase of land/plot shall form part of housing loan within the overall entitlement under the scheme and shall be restricted to the extent of maximum Rs. 50.00 Lakh or 60% of the cost of plot of land whichever is less, provided the area of proposed land shall not be more than 5440 Sq ft or 1 Kanal. Loan amount for purchase of plot shall be within the overall ceiling of housing loan eligibility and in no case should surpass 60% of total loan eligibility.
vi.        Loan for construction of house for borrowers who have already availed housing loan for purchase of land (plot): Loan Limit in such cases shall be fixed after considering the cost of construction (of house / flat) less by the stipulated margin. However, it shall be ensured that EMI for the loan for construction of house flat together with the EMI towards loan already availed for purchase land / plot and any other credit facility does not exceed the stipulated deductions.

Gross deductions inclusive of loan EMI/s (existing as well as proposed) should not exceed:

  1. 60% of gross income: For individuals having income from all sources / taxable income up to Rs. 10.00 lakh p.a
  2. 65% of gross income: For individuals having income from all sources above Rs. 10.00 lakh up to Rs. 30.00 lakh p.a
  3. 75% of gross income: For individuals having income from all sources above Rs. 30.00 lakh p.a

Note: Estimated income tax / TDS, PF contribution, Premia towards insurance and other compulsory deductions shall be included for computing gross deductions. 


  Margin

For Construction / purchase:

Loan up to 30 Lakh

10%

Loan above Rs. 30 Lakh to Rs. 75 Lakh

20%

Loan above Rs. 75 Lakh

25%

For Purchase of Land / Plot : Borrowers’ contribution (margin) shall not be less than 40% of the cost of land / plot

*Cost of plot of land as per sale deed in case of purchased land and Forced sale value of land in case of owned land, can be taken as part of margin contribution by the borrower subject to obtaining of valuation report from the approved valuer on panel of bank or sale deed as the case may be.
** Stamp duty, registration and other documentation charges shall not be included in the cost of the housing property to be financed so that the effectiveness of LTV norms is not diluted. In case of already built houses/flats LTV is the  ratio of the fair market value  of an asset to the value of the loan granted for  purchase of the asset and is calculated by dividing the loan amount by the fair market value of the property. Loan-to-value tells the lender if potential losses due to nonpayment of the loan can be recouped by selling the asset. Cost of land is also to be included in the fair value of property if the land is mortgaged to the bank.

For Supplementary/ repairs/renovation/additions/alterations:

For Loans up to Rs. 5.00 Lakh

NIL

For Loans above Rs. 5.00 Lakh to Rs. 10.00 Lakh

10%

For Loans above 10.00 lakh

15%

 


  Interest Rate (Floating) with a reset clause of 1 (one) year.

For first housing loan

Limit

Rate

Up to Rs. 100.00 Lakh

1 year MCLR

Above Rs. 100.00 Lakh to Rs. 300.00 lakh

1 year MCLR + 20 bps

Above Rs. 300.00 Lakh

1 year MCLR + 35 bps

For Second housing loan

Limit

Rate

Up to Rs. 100.00 Lakh

1 year MCLR + 100 bps

Above Rs. 100.00 Lakh to Rs. 300.00 lakh

1 year MCLR + 150 bps

Above Rs. 300.00 Lakh

1 year MCLR + 200 bps

 


  Processing Charges

0.25% of the loan amount with minimum of Rs. 500 and maximum of Rs 10000/- plus applicable service tax.

In case of takeover from other banks/FIs, no processing charges will be levied.


  Prepayment Penalty No Pre-payment penalty to be charged on housing loans granted on floating interest rate basis. 

  Security

Purchase/Construction:
I Primary:

  • Equitable/ Registered Mortgage of house property/flat to be constructed/ purchased.  (House property to include land underneath & appurtenant thereto in case independent house only).
  • The title of the property must be clear, marketable and free from encumbrance.
  • Where  mortgage  of     house  /flat  cannot  be   created immediately and / or possession of house / flat is not given in situations like house/flat or under construction house / flat or to be constructed house/ flat  is being purchased/ from   the   Housing   Board/        Co-operative   Society   / Development  Authority/  Construction  Company/  Builder and   title/conveyance   deed   is   executed   in   favour   of purchaser   only   after    completion   of   full   or   partial construction after  purchaser making full payment of the cost   of   house/flat,      a   tripartite   agreement   shall   be executed  amongst  the  1)  Housing  Board/  Development authority  /  Co-operative Society/ Construction Company/ Builder,  2)  The Borrower and 3) The Bank   wherein the Housing   Board/  Development  Authority  /  Co-operative Society/  Construction Company/ Builder undertakes that the  title   to  house/  flat     shall  be  transferred  to  the Borrower     immediately    on    receipt    of    entire    sale consideration and the Bank’s lien shall also be marked in their/ his records, thereafter to be followed by execution of mortgage deed in favour of the Bank once the project has been completed and Sale Deed (Deed of apartment/Conveyance Deed   in case of Flats) has been executed. Charge to be registered in favour of the Bank with the    concerned    authorities.    Besides    tripartite agreement an affidavit cum undertaking from the Housing Board/ Development Authority / Co-operative Society/ Construction Company/ Builder to the effect that the construction shall be as per the sanctioned plan & building bye laws, to be obtained.

II Collateral:

  • No collateral security /3rd  party guarantee is required in all cases except in case of following:
  • Pensioners- guarantee of spouse / Legal Heir(s), who is / are entitled for family pension, is to be obtained
  • NRIs- 3rd party guarantee of two resident Indians of sufficient means to cover the liability apart from the other securities shall be obtained.
  • Loans upto Rs.2.50 lacs (Rs.5.00 lacs in case of employees of J & K State Govt) to be granted for the purpose of repairs/ additions/alterations /extension of existing houses, where the mortgage of the house property is not taken as security.

* The mortgage of the existing house property shall not be insisted for loans upto Rs.2.50 lacs (Rs.5.00 lacs in case of employees of J & K State Govt) granted for the purpose of repairs/ additions/alterations /extension  of  existing  houses.  (This condition is not applicable for loans to pensioners and where all the borrowers are not the owner of land/house/flat). These loan cases shall be secured by third party guarantee of two persons or Assignment of Life Insurance Policies, Govt. Securities, IVP’s, NSC’s KVP’s or such other security as is deemed appropriate by the Sanctioning Authority. However, negative lien over the existing house property for which the facility is granted shall be obtained along with an irrevocable power of attorney executed by the borrower authorizing the Bank to sell the house in case of default.

Note: In all the above cases, Post –dated cheques for EMIs and one undated cheque with blank amount field to be obtained from borrowers other than Government Employees/Pensioners drawing salary through  our  branches.  The cheques  shall  be drawn in the name of “The Jammu & Kashmir Bank Limited A/c no  XXXX  of  Mr./Ms.  YYYYYYY”    All cheques shall  be  account payee and kept in safe custody. 


     

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