Will banks disburse loans before I put in my own money?

No. However, in cases where you avail yourself of finance from a source like provident fund (PF), which generally takes a long time to get disbursed, some banks agree to release a part of the loan.

It is necessary to put in some money in the property before you avail yourself of the disbursement. You also need to produce evidence testifying that you have got the source of funds (for example, a sanction letter in case of a loan from the PF office) for meeting your own share of the cost of the property.

Also, in certain cases where an under-construction project is pre-approved, the bank may allow you to bring in your share in installments proportionate to the disbursement, rather than insist on bringing in the entire contribution upfront. The bank insists on registration of the sale agreement before making disbursement.

However, my seller refuses to sign the agreement till he receives the money. What should I do?

You can show the seller the sanction letter of the bank and pay your part of the property cost to him immediately. Once this is done, enter into a partly paid agreement with the seller. This mentions the cost of the house and the amount paid to the seller along with the balance amount to be paid.

The document sets a time limit for the remaining payment (usually 15 to 30 days) to be made and contains a clause that the agreement would be null and void in case of failure to pay within the stipulated time.

This agreement should be registered and the disbursement can be taken from the bank directly in the name of the seller after that.

Some sellers may refuse to enter into such an agreement.

In such cases, the bank may agree to send its representative with a pay order for the loan amount to the registrar’s office so that the registration and the handing over of the payment can be done simultaneously.

However, this is a rather clumsy arrangement. Reputed builders normally have no problems entering into and registering a partly paid agreement.

Can I switch jobs or leave my job for self-employment during the loan tenure?

You can switch jobs during the course of your loan or leave your job for self-employment during the loan tenure. However, you have to keep the bank informed.

If repayment is done through deduction against salary, the same arrangement should be put in place in consultation with your new employer.

Or you can arrange for post-dated cheques for the installments.

Also, send a copy of your new appointment letter to the bank.

I am buying a residential property that has a title defect because of which the price is low. My lawyer feels that the defect is minor and can be rectified. I need a loan to buy this property. I can provide security of my existing house, which has a higher value than the new property. I am not interested in taking a home equity loan (loan for any use against property) as it is more expensive. Can I get a regular home loan for buying this property?

To the best of our knowledge, only one foreign bank has a programme to provide a regular home loan against security of an alternative property where, because of some reason, the property being bought cannot be offered as security.

The loan will be slightly more expensive than a regular home loan but cheaper than a home equity loan.