CASE STUDY ON HOME

LOAN

Customer Information and

Requirement Presented in the Case
Mr. and Mrs. King have approached us for a home loan
for construction of house at the cost of Rs. 18 Lakh.
The house is to be constructed on 15 cent vacant plot
owned by Mr. King.
Mr. King is working in a MNC company, M/s Soft
Solution for the past 12 years. Mrs. King is working in
a reputed advertising firm for the past 8 years.

A&L
Mr. King:

Assets

Liabilities

2 acres agricultural land valued - 10

lakhs
15 cents of land worth
lakhs

-4

Investment in securities
lakhs

- 10
-5

Total

share in HUF property worth - 3

- 38 Lakh
lakhs
Movables worth
lakhs
Jewelry
4 lakhs
Investment in securities

-2

-9

Cash and Bank balance

lakhs

Other movables
Mrs.
lakhsKing: Assets

Vehicle loan from IOB

lakhs

Liabilities
Total loan from IOB
Jewel
- 2 lakh
1 lakh

-8
-6

Credit Report of Mr. King

Details

Amount in lakhs

Agri Land (50%)

5.00

Land (2/3)

6.00

Cash & BB

4.00

Investment

10.00

Other Movable

3.00

Total

28.00

Borrowings(Vehicle
Loan)
Net worth

2.00
26.00

Credit Report of Mrs. King

Details

Amount in lakhs

HUF Property (1/4Share) (2/3)

0.50

Investment

6.00

Jewelry

4.00

Movable

5.00

Borrowings (Jewel loan)

1.00

Net worth

13.50

Income details

Particulars

Mr.King

Mrs.King

Gross Pay

45000

29000

Statutory Deductions

12000

7000

Loan Deductions

8000

5000

Net Pay

25000

17000

As per industrial estimate they will be getting a salary hike of

about 8 % every year
Mr. and Mrs King are having remaining 21 yrs and 24 yrs of
service respectively

Appraisal Note

COST OF
CONSTRUCTION

RS.18,00,000

COST OF LAND

RS. 9,00,000

TOTAL PROJECT COST

Rs.27,00,000

Since, we are not aware of when the land is acquired,

i.e. ., within 6 months or earlier to it, we will consider the
cost of construction as total project cost. Hence LTV will
be Rs16,20,000/- i.e., 90% of Rs.18,00,000/-

Appraisal note contd.,

Gross Income

Net Income

Mr.King

45000

25000

Mrs.King

29000

17000

Total

74000

42000

60 Times of gross

44,40,000

Appraisal note contd.,

EMI for 1 lakh for 20 years @ 11% = Rs. 1100 (approx.)
EMI for Rs16.20 Lakh for 20 years @ 11% = Rs.
17820/ Net Pay EMI = 42000 17820 = Rs. 24180/= Rs. 29600
40% Gross
Though Net Pay less EMI < 40 % Gross, NTHP is
greater than 20,000/-. Hence permissible
Hence, Loan amount of Rs16.20Lakh is eligible with 240
monthly EMI of Rs. 17820/-

Papers to be submitted by the

Borrower
Filled application form with photographs affixed.
Assets and liability statement of Mr. and Mrs. King
with proof.
KYC documents of both.
Proof of employment and salary slips for self and
spouse for 6 months.
IT returns for 3 Years.
6 months statement of Accounts where salary is
crediting.
Employment ID
Estimate of the project.

Papers to be submitted by the

Borrower
IOB Vehicle loan statement
Approved Building Plan & Plan Permit.
Copy of the parent document for 13 / 30 years
Latest Tax paid receipt and EC, Patta
Valuation report from Panel Engineer
Legal Opinion from Panel advocate.
Copy of receipt of investment in securities
worth 10lakhs & 6lakhs
Documents supporting the share in HUF
property worth 3lakhs

Checklist
KYC documents-Address proof , ID proof and PAN card.
Proof of employment and salary slips for self and spouse for 6 months.
IT returns for 3 Years.
6 months statement of Accounts where salary is crediting.
Company Profile
Details of loans mentioned in A and L.
Estimate of the project from approved Engineer.
Approved Building Plan ,Planning Permit
Copy of the parent document for 13 / 30 years
Latest Tax paid receipt and EC, Patta
Valuation report from Panel Engineer
Legal Opinion
Creation of EM
Deposit of title deeds

Formalities to be completed
CIBIL Report to be taken for both Mr. and Mrs. King and analyzed.
Prepare Credit Report.
Scoring Model.
Appraisal.
Pre-sanction visit.
Sanction of Loan and acknowledgement from customer.
Documents Execution (D2,D-128,D-32)
All charges to be recovered like CIBIL, Stamp & Processing Fee.
EM Creation in Notified Branch.
Registration of Memorandum of Deposit of Title deeds (MOD) in SRO
and further EC to be taken.
Home SURAKSHA to be done
Loan Disbursement (Stagewise)
CERSAI to be registered within 30 days from first disbursment.
After Completion of Construction Insurance to be done.

Risks Involved in the Proposal

Saleability of the land property to be
ensured.
Mr. King is working in MNC Company
and Mrs. King is working in private
company.Thus job security cannot be
ensured for both of them.
Since they already availed vehicle
loan and jewel loan from IOB, Reason
for approaching us to be sought.