Your Queries: Loans – If PMAY subsidy loss less than gain on rate cut, go for balance transfer

By Chaitali Dutta

My home loan started in January 2020. Since then I have received two installments from Pradhan Mantra Awas Yojana (PMAY) subsidy, amounting to Rs 1 lakh. The total subsidy is Rs 2.6 lakh. (A) When will they release the remaining subsidy? (B) While interest rates have come down to 6.8%, my home loan which was sanctioned at 8.6 % has not been reduced to that extent. It was reduced to 7.9% and that too after paying fees of Rs 5,900. What will happen to my PMAY subsidy balance if I change my home loan to another lender?
—R S Ghuman
There is no established timeline for the release of the PMAY subsidy. You will have to wait it out. Check if the floating interest rate applicable to you (sanction letter) is linked to the repo rate. If not, the interest rate reductions are not passed on to the consumer in a transparent way. If you do a balance transfer, you will lose the benefit of subsidy for the remaining unexpired period of the loan. Evaluate whether the loss in subsidy is lower than the gain in the interest rate reduction, in which case you may shift your loan to the new organisation.

I am the nominee of the policy holder. I do not have the original policy and have only the photocopy. Will it be accepted by LIC?
—N M Ahuja
I presume that you want to claim the pay-out on the policy holder’s life. In such a situation, the original policy has to be produced along with the claim form, death certificate, form of discharge and your identity proof and bank details. Only then the policy pay-out will happen.

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Will a bank give me and my brother a joint loan to construct a house?
—Amandeep Kohli
Yes, it is possible. Siblings may jointly apply for such a loan. The documents—proof of ownership of land, estimate of the cost of construction by an authorised architect, both your income proofs and ability to repay—has to be established.

Will the bank assess market price of a flat when finalising its value?
—Ashok Kumar
For a new flat, banks do not go for an independent valuation. Loan is granted on the agreement value. For a second sale, where the buyer is availing a home loan, the bank asks for property valuation certificate by their approved valuer.

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