Housing finance queries answered by R.P. Deshpande, Director, Institute of Home Finance

We purchased a flat against a loan from ICICI Bank. The documents including the title deed were directly taken by the bank from the registrar office. We have now settled all our outstanding loans with the bank. But the bank has lost our title deed. Please advise us how to proceed further.

Prabha Murali, Chennai

Please approach the higher authorities of the bank and seek original documents within 15-30 days. If there is no response, you need to escalate the issue to the Banking Ombudsman. You can also hire a leading advocate and initiate legal proceedings against the bank.

I am looking for a home loan of about Rs. 28 lakh for a flat to be completed two years from now. Please tell me whether to go for a fixed or floating loan. I have read that some banks don't pass on the benefits of reduced interest rates to existing customers in a floating plan. Which are the good banks to consider for a floating plan? I plan to complete the loan in 7-8 years.

Raghavendra. A, Bangalore

It is always advisable to take home loans (which are normally long-term loans) at floating rates, as over the entire period, considering the possible variations, the average interest rate would be much less than fixed rate loans. It is true that many banks in the past have not passed on the benefit of reduced interest rates to the existing borrowers. Such instances have reduced to a good extent after interest rates became benchmarked to the ‘Base Rate’ system from July 2010. You can opt for SBI or PSU banks or leading housing finance companies like HDFC or LIC HFC and so on.

My daughter and son-in-law, both employed, want to avail a joint housing loan of Rs. 60 lakh in a 2:1 ratio on the basis of their salary income. The EMI will be paid from their joint SB salary account. They can claim IT deduction towards interest payments in the same 2:1 ratio to a maximum of Rs. 1.5 lakh each if they stay in the house; or without limit if they let it out. If my daughter takes a break from work temporarily or permanently, and the entire EMI has to be met by my son-in-law, can he claim deduction for the entire interest paid or only for two-thirds of it, assuming the house is let?

Radha. V, Chennai

Your daughter and son-in-law can create an agreement between them mentioning the ownership in the ratio of 1:2 and claim Income Tax concessions on home loan repayment, separately. Once your daughter stops working and stops claiming IT concessions, your son-in-law can claim the entire interest less annul value (rental income less property tax paid less 30% standard deduction), if the premise is rented out.

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