tion to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may ei

With increasing property prices in India, making investments in second home has emerged as a lucrative option for those who already have a residential house. Generally, such real estate enthusiasts prefer to go by the route of home loan to buy the house and give it on rent. The rent coupled with the tax deductions available on loan repayment paves way for the incremental outflow every month while the home becomes an immovable asset for the entire life period.

Buying a home loan can be a loaded question. The "dea" of paying expensive EMIs every month in the wake of increased interest rates on loans can be irksome for the most. Still, it can be a productive choice in the long run. However, a majority of such investors are unaware of the fact that their home loan agreement does not allow them to rent out the house without prior approval from the concerned authority.

If the proposed lessee is a corporate, they will stress on the lessee to obtain a written permission from the lender which is actually important as well to avoid nasty surprises later. Although it is a clause that most investors loath but the legal tangles are seldom solved.

Why such a restrictive clause?

There is a valid reason for why banks and other financial institutions do not allow their home loan customers to rent out the residential property availed through home loan. Since buying a home is an emotional issue for many Indians, no borrower would want to be deprived of enjoyment of the asset attached with a large emotional value. The fact itself reasons for a low home loan default rate in the country.

The rule is not valid for the residential property to be given out on commercial property rentals. Moreover, there is no emotional aspect attached in any of the cases. Undoubtedly, a borrower rents out the property with an expectation to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may ei

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Buying a home loan can be a loaded question. The "dea" of paying expensive EMIs every month in the wake of increased interest rates on loans can be irksome for the most. Still, it can be a productive choice in the long run. However, a majority of such investors are unaware of the fact that their home loan agreement does not allow them to rent out the house without prior approval from the concerned authority.

If the proposed lessee is a corporate, they will stress on the lessee to obtain a written permission from the lender which is actually important as well to avoid nasty surprises later. Although it is a clause that most investors loath but the legal tangles are seldom solved.

Why such a restrictive clause?

There is a valid reason for why banks and other financial institutions do not allow their home loan customers to rent out the residential property availed through home loan. Since buying a home is an emotional issue for many Indians, no borrower would want to be deprived of enjoyment of the asset attached with a large emotional value. The fact itself reasons for a low home loan default rate in the country.

The rule is not valid for the residential property to be given out on commercial property rentals. Moreover, there is no emotional aspect attached in any of the cases. Undoubtedly, a borrower rents out the property with an expectation to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may ei

will stress on the lessee to obtain a written permission from the lender which is actually important as well to avoid nasty surprises later. Although it is a clause that most investors loath but the legal tangles are seldom solved.

Why such a restrictive clause?

There is a valid reason for why banks and other financial institutions do not allow their home loan customers to rent out the residential property availed through home loan. Since buying a home is an emotional issue for many Indians, no borrower would want to be deprived of enjoyment of the asset attached with a large emotional value. The fact itself reasons for a low home loan default rate in the country.

The rule is not valid for the residential property to be given out on commercial property rentals. Moreover, there is no emotional aspect attached in any of the cases. Undoubtedly, a borrower rents out the property with an expectation to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may ei

buying a home is an emotional issue for many Indians, no borrower would want to be deprived of enjoyment of the asset attached with a large emotional value. The fact itself reasons for a low home loan default rate in the country.

The rule is not valid for the residential property to be given out on commercial property rentals. Moreover, there is no emotional aspect attached in any of the cases. Undoubtedly, a borrower rents out the property with an expectation to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may ei

tion to earn profits in future or avail opportunity of cost saving from the asset, which actually drives the decision to take the loan. The default rate goes high if there is a large gap between what the borrower earns and saves.

For that reason, the banks often ask the future usage of house the borrower intends for. And, this is a basic criterion which is followed by all banks. If the house is to be used as an office or as an investment, then a bank may either decline the home loan, or charge a higher rate of interest to compensate for the additional risk they have taken. Some banks comply with their specific program to lend to buy residential properties for usage by doctors as clinics at a slightly higher cost than normal home loans.