I’m taking a Home Loan for Rs. 20 lakhs. Will the bank finance stamp duty and registration charges. What has RBI said about this?
Only for loans less than Rs. 20 lakhs, banks will provide finance for stamp duty and registration. Here’s the RBI circular on this.
Inclusion of stamp duty and other charges in LTV ratio
Please refer to our circular DBOD.No.BP.BC.78/08.12.001/2011-12 dated February 3, 2012 on ‘Housing Loans by Commercial Banks - Loan to Value (LTV) Ratio’ whereby banks were advised that they should not include stamp duty, registration and other documentation charges in the cost of housing property so that the effectiveness of LTV ratio is not diluted.
It has been brought to our notice that these amounts form around 15% of the cost of the house and place a burden on the borrowers from economically weaker sections (EWS) and low income groups (LIG). With a view to encourage availability of affordable housing to such borrowers, it has been decided that in cases where the cost of the house/dwelling unit does not exceed Rs.10 lakh, banks may add stamp duty, registration and other documentation charges to the cost of the house/dwelling unit for the purpose of calculating LTV ratio.
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