Home Loan Queries: Here’s why you cannot take home loan and renovation loan from two banks

By Chaitali Dutta

Is it possible to take loans from two banks? One for purchasing the flat and the other for renovating the flat?
—Gaurav Kumar
This will not be possible as the home loan bank will have the mortgage of the property. The home loan is usually 80% or less of the valuation of the property. Hence the same bank is happy to extend to you a renovation loan for the same property, as the mortgage is already in its favour. In case you would like to take the loan for renovating from another bank, the renovation loan has to be taken as a personal loan or a loan against security independent of the house.

I want to prepay a part of my home loan. Should I pay as a lumpsum or pay every quarter?
—Amit Agarwal
If you have the funds available, it is better to do the pre-payment in one go as the interest saved will be higher. The interest on a home loan is calculated on a daily reducing balance. Hence a lumpsum payment now will reduce your interest significantly as compared to the same amount being repaid on a quarterly basis over a period of time.

I have more than one senior saving scheme accounts (SCSS) in different banks, all together below `15 lakh. Some of these accounts are either on single name or with my spouse as second holder. Now that my wife has passed away, I want to close her accounts. The bank says that I being the second holder, the accounts will be transferred to my account. If that is done, it will cross Rs 15 lakh limit. What should I do?
—M L Rao
The correct procedure is to close the account on the death of the depositor in case of an SCSS. Please submit a written application to the bank for the said closure, providing the death certificate as well as the said Form F. Obtain their acknowledgement on a duplicate copy. In case the bank refuses to accept your application, please send the said papers by way of a registered AD. By doing this, you will have proof of you following the correct procedure. The bank is required to close such SCSS on the death of the senior citizen and the deposit attracts a rate of savings bank account from the date of death till the transfer of proceeds to your savings bank account.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com).
Send your queries to fepersonalfinance@expressindia.com

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