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Home Loan Agreement

        It is the Agreement which a customer need to sign before going for disbursement of the loan which he requested to the bank to fund on the property. Its consists of all terms and conditions that the bank asks the customers to fulfil. Please read the document carefully before signing it as it is a long term contract between the customer and the Bank. Once you sign the document it can’t be altered or modified until and unless you repay the loan in all respects.
A. Agreement and Definitions >> Show Details(...)
This Agreement is made at ____________ on this ___ day of _________20__ between ________________ Bank Ltd of the one part and Mr. /Mrs ______________ S/O ___________ residing at _________________ here in as referred as “Borrower” of the other part.
Whereas the borrower(s) whose names are mentioned above are requested _______ bank to provide him/them/it a loan facility in relation to a property and the _____bank agreeable to provide such loan facility.
1. Definitions
In this agreement the following words shall have the following meaning
“Agreement” means The Home Loan Agreement.
“Bank” means a banking company incorporated and registered under the provisions of the companies Act 1956, having its registered office at ______________________.
Borrower means one or more individual(s), a sole propriety firm, partnership firm or a limited company whose name(s) and address(s) is are stated in executing this agreement as borrower(s) and
a. In case when the borrower is one or more individuals each one being deemed to have made this agreement individually and in case of more than one, all of them having agreed to liabilities hereunder jointly and severally and the term “Borrower” shall include his/their respective heirs, executors, administrators and legal representatives and permitted assigns.
b. In case of the borrower is a sole propriety firm, the person whose name appears as sole proprietor and the term Borrower shall include his heirs, executors, administrators and legal representatives and permitted assigns.
c. In case the borrower is a partnership firm, the persons whose names are mentioned in conducting their activities in partnership in the name and the style as mentioned in the Firm column. The said firm together with his partners in their individual capacities here in after referred to collectively as the Borrower and shall include them and survivors and survivor of them or partners or partner for the time being thereof and his/her/their respective heirs, executors, administrators, legal representatives, successors and permitted assigns.
d. In case the Borrower is a limited company the term Borrower shall include its successors, administrators and permitted assigns.
EMI or Equated Monthly Instalment shall mean the amount payable every month by the Borrower to the Bank comprising of Interest or as the case may be principal and interest.
Home Loan means the principal amount of loan granted by the Bank to the Borrower in terms of this agreement.
Improvement includes construction, modification, renovation, maintenance or any act for the i) upkeep ii) maintain iii) enhance the utility of, the property.
Interest Rate means the rate at which the bank shall compute and apply interest on the Home Loan.
Default Interest Rate means the rate at which the bank shall compute and apply interest on amounts not paid when due for payment by the Borrower to the Bank.
B. Banks and Borrowers Agreement >> Show Details(...)
The bank agrees on the borrowers request, representations, warranties, covenants and undertakings contained in the application for Home Loan and other documents executed by the Borrower in relation to the Home Loan, to lend to the borrower and the Borrower agrees to Borrow from the Bank , the Home Loan on the terms and conditions as fully contained in this agreement.
The relationship between the Bank and Borrower as lender and Borrower shall commences from the date of this Agreement and subsist until all monies dues and payable by the Borrower to the bank under this Agreement and in all the other documents pursuant here to shall have been fully paid to and received by the Bank.
The Bank shall be entitled at any time at its sole discretion to review/ modify/ add to, all/ any of the terms and condition of sanction/ grant of the said loan to the Borrower and also which are contained herein, by giving a written notice to that effect to the Borrower and the Borrower shall be bound by/ bound to comply with the same.
Fees, Charges and Claims
The Home Loan shall bear Processing Fees, Administrative Fees and any other fees as mentioned in this Agreement, Which the Borrower Agrees to reimburse to the Bank separately.
The Bank shall be entitled to recover from the Borrower, Commitment charges at the rate mentioned in this Agreement on the amount of Home Loan.
The Bank shall be entitled to recover from the Borrower Prepayment charges mentioned at the rate mentioned in this agreement on the amount of Home Loan, repaid by the Borrower ahead of the Repayment terms and conditions mentioned in this Agreement.
C. Rate of Interest (ROI) >> Show Details(...)
The Borrower shall be charged with interest (Fixed or Floating) for the Home Loan and the Interest on the loan shall begin to accrue from the date of the debit to Home Loan Account.
Fixed ROI : In the event the Borrowers opts for Fixed Rate of Interest (ROI) offered by the bank, the rate of interest applicable to the loan as at the date of execution of this Home loan agreement is mentioned in the schedule.
Though the ROI is fixed at the beginning of the Loan, is subject to change / revision upwards or downwards at the sole discretion of the bank under the exceptional and extraordinary changes in the money market conditions.
The Borrower shall reimburse or pay to the Bank such amount as may have been paid or payable by the Bank to the Govt on account of any tax levied on interest on the loan by the Govt. The reimbursement or payment shall be made by the Borrower as and when called upon to do so by the Bank.
Floating ROI: In the event the Borrowers opts for Fixed Rate of Interest (ROI) offered by the Bank, the rate of interest applicable to the loan as at the date of execution of this Home loan agreement is mentioned in the schedule.
The variable rate of interest mentioned in the schedule is that prevailing on the Effective date of this Agreement. The interest rate shall be subject to variation from time to time at the sole discretion of the bank prospectively. The spread will remain constant / unchanged during the course of the loan.
The interest shall be computed at month/ quarter/ half year/ year rests, on actual outstanding balance of the loan at the beginning of the month, on the basis of a year of 365 days.
Interest on Home Loan shall be payable every month separately until the repayment of Home Loan by way of Equated Monthly instalments (EMI) shall have commenced.
Interest Tax and other levies as may be applicable from time to time on the Home Loan shall be borne by the Borrower.
D. Disbursement >> Show Details(...)
The Bank shall disburse the loan in one instalment or in suitable instalments by taking needs of the Borrowers and construction progress in to consideration.
The Bank shall disburse the Home Loan by issuing a Banker’s payment order or Demand Draft crossed as “A/c payee only “in the name of the seller or vendor of the property which is being purchased by the Borrower.
If in case of the Balance transfer the loan amount shall be disbursed in the name of the previous financier towards the payment of the previous loan.
In case of construction loan the loan amount shall be disbursed in the name of the Borrower if it is a self construction, otherwise in the name of the builder or developer by whom that construction work was done and the disbursal shall be subject to verifications of progress of work and satisfactory end use of previous disbursements supported by valuer / site engineers reports to the bank satisfaction.
The Borrower shall pay the charges which are in relation to the Disbursement.
The Bank shall not disburse any amount in further if the customer gets default in paying the repayment amounts.
Interest on the loan will begin to accrue in favour of the Bank as and from the date of the cheque or pay order preparation irrespective of the collections/realisations.
The disbursement of the loan will be made after the Borrowers own contribution has been made for the same to the Builder/ Developer/ Vendor, and proof is furnished to the Bank.
E. Repayment >> Show Details(...)
The Home Loan be payable by the Borrower to the bank by the way of Equated Monthly Instalments (EMI) towards repayment of Principal and Interest.
The Borrower shall pay the interest amounts or Pre EMI (PEMII) to the Bank on the part of loan availed from the Bank in case of properties which are under construction.
The Equated Monthly Instalment (EMI) amount shall be arrived at so as to comprise repayment of both principal and interest calculated on the basis of the interest rate, periodicity of compounding, repayment and of effecting credits in the account so as to aim repayment of the entire liability under the Home Loan at the end of its tenure.
The Borrower shall make separate payments in case of the Home Loan to be closed before the commencement date.
In the case of Default the Borrower shall be liable to pay additional Taxes, expenses and charges applicable on the Home Loan to the bank.
No notice, reminder or information will be given to the Borrower regarding his obligation to pay the EMI regularly on due date. The Borrower is responsible for the timely repayment of the EMI to the Bank.
PDCs should be duly signed by the borrower, bear the exact EMI amount written and should be drawn on the Salary Account / Business Account, as the case may be evidenced by signature verification from the bank on which the PDCs are drawn.
All payments of principal and payment of interest and all other amounts by way of EMI or otherwise shall be given effect to in the Home Loan Account in accordance with the method of effecting payment as stated in the agreement or as adopted by the Bank from time to time.
F. SECURITY >> Show Details(...)
The Borrower shall create security and or guarantees for the repayment of the loan with interest in favour of the Bank as may be required by the Bank
In addition to the above security the Borrower shall deposit all the original documents / agreements of the title relating to the said property.
The Borrower may be directed to execute irrevocable Power of Attorney cum Declaration in connection with such deposit of the original documents.
The Bank shall have the right to decide the type of mortgage / security to be created by the Borrower for securing the loan and all other amounts and the Borrower shall be bounded to create mortgage as required by the Bank.
The Borrower shall be available to the Bank officials until all accounts between the Bank and Borrower in respect of the loan are settled completely.
G. COVENANTS >> Show Details(...)
The Borrower hereby covenants with the Bank that the Borrower shall
a. Use the said flat/house for the personal occupation of himself/herself and the members of his/her family only, and for no other purpose whatsoever.
b. Comply with all the applicable laws / obtaining permissions with respect to purchase of property for which the bank has advanced and ensure that the property is not in violation of laws in force.
c. Always have until all his dues hereunder are not repaid to the bank, a clear and marketable title to the property, free from all encumbrances whatsoever.
d. Pay all rents taxes, cess and other outgoings payable by him / her in respect of the said flat / house to the Government, Municipal Corporation, Co-operative Housing Society, and Revenue Authorities etc.
e. Maintain the property in good and substantial state or undertake repair as and when necessary for well keeping of the house and use it for residential purpose and not for any non-residential purpose.
f. Shall not, during the tenure of this Agreement, avail of or obtain any further loan or facility on the security of the property without the prior written consent of the Bank.
g. Notify the bank of any change / termination in the address, employment, business or profession of the Borrower with in 10 days of such change.
h. Execute all such other agreements, documents, declarations, undertakings as may be required by the bank at any time during the term of the loan.
i. Shall at all time be entitled through its authorised representative/s to enter the said flat / house for the purpose of inspecting and viewing the condition thereof, without any obstruction from the Borrower or any other person in occupation thereof.
j. Shall not leave India for employment or business or long stay with out first fully repaying the Home Loan then outstanding due and payable with interest and other dues, including repayment charges.
H. EVENTS OF DEFAULT >> Show Details(...)
The bank may by a written notice to the Borrower, declare all sums outstanding under the Home Loan including the principal and all accrued interest to have become due and payable forthwith and the security created in favour of the Bank for the loan shall become enforceable upon the occurrence of the any one or more of the following events.
a. Payment of Dues
If default shall have occurred in payment of the Pre EMI’s (PEMII) and or EMIs and/or in payment of any other amounts due and payable to the Bank in terms of this Agreement and/or in terms of any other agreement(s) / document(s) that may be subsisting or that may be executed between the Borrower and the Bank.
b. Performance of Covenants
If default shall have occurred in the performance of any other covenants, conditions and representations or agreements on the part of the Borrower under this agreement or any other agreement(s) between the Borrower and the Bank in respect of the Loan or any other loans.
c. Supply of misleading Information
If any information given by the Borrower to the Bank in the application or otherwise is found to be misleading or incorrect in any material respect or any representation or any warranty referred to in this Agreement is found to be incorrect.
d. Sale or Disposal of property
If the property or any part thereof is sold, disposed of , charged, encumbered or otherwise alienated in any manner whatsoever without prior permission of the Bank.
e. Attachment or Distraint of property
If an attachment or distraint is levied on the Property or any part thereof and/or certificate proceedings are taken or commenced for recovery of any dues from the Borrower.
Borrower fails to pay any taxes, duties and other statutory dues/ obligations required to be fulfilled.
g. Non-delivery of cheques
If the Borrower fails to deliver post dated cheques in accordance with the terms of the Loan or as and when demanded by the Bank.
h. Security becoming unenforceable
If any security or guarantee of the Loan becomes unenforceable or in fructuous or is challenged by the Borrower or any other person.
i. Cross default
If the Borrower makes a default in performance of any of the terms, covenants and conditions of any other loan or facility provided by the bank / Financial Institution / Non Banking Finance Company/ Housing Finance Company and other lenders to the Borrower.
j. Death of the Borrower
In the event of the death of the Borrower.
k. Insolvency
If the Borrower commits an act of insolvency or if the Borrower is declared insolvent or bankrupt or if a liquidator, receiver or official assignees is appointed in respect of any property or estate of the Borrower of if the Borrower makes any application for declaring himself an insolvent or if an application for declaring the Borrower as insolvent/bankrupt is made or any order is passed by any competent authority for taking the Borrower into insolvency then in any of these events the entire Loan amount shall become due and payable forthwith.
l. Notice on the Happening of an Event of Default
In the event of occurrence of an event of default as provided herein or upon happening of an event, which would have or perceived to have a material adverse effect on the ability of the Borrower to repay the loans in terms of this agreement or dilutes the value or the enforceability of the securities offered, the Borrower shall forthwith give notice to the Bank in writing within ____ days specifying such event of default and without prejudice to the rights of the Bank, upon such notice by the Borrower or the Bank coming to Know such events or events of defaults, the entire principal amount of loan together with interest and all other amounts as stated herein shall become due and payable forthwith and the Bank shall be entitled to enforce the security and recover the Loan with interest and all other amounts.
m. Collections
The Borrower expresses, recognizes and accepts that the Bank shall, without prejudice to its right to perform such activities itself or through its officers or employees, be entitled and full power and authority to appoint one or more third parties as the Bank may select and to delegate to such third party all or any of its functions, rights and powers under this agreement relating to the administration of the loan including the right and authority to collect and receive on behalf of the Bank from the Borrower the PEMI, EMI and other amounts due by the Borrower under this agreement.
The Borrower expressly agrees that, in the event of the Bank appointing an agent as aforesaid
The Bank shall be entitled to provide information held by the Bank in relation to the Borrower and the Loan.
The Borrower shall cooperate with such agent appointed by the Bank in the name manner as it would with the Bank in terms of this agreement.
I. WAIVER >> Show Details(...)
No delay in exercising or omission to exercise, any right, power or remedy accruing to the Bank upon ay default under the Loan or any other agreement or documents shall impair any such right, power or remedy nor shall it be constructed to be a waiver thereof or acquiescence in such default; nor shall the action or inaction of the Bank in respect of any default or any acquiescence in any default, affect or impair any right, power or remedy of the Bank in respect of any other default.
J. MISCELLANEOUS >> Show Details(...)
a. Place and Mode of Payment by the Borrower
All monies, cheques and Bank drafts payable by the Borrower to the Bank under or in terms of this agreement shall be drawn in favour of Bank on a scheduled Bank and/or any other Bank in the town or city where the Office of the Bank is situated or in any other manner as may be approved by the Bank and shall be so paid as to enable the Bank to realize the amount sought to be paid on or before the due date of payment Credit will be given only on realization thereof by the Bank
The Borrower may, if he so chooses, issue standing instructions to the Bank in which the Borrower has an account, to debit the account of the Borrower every month and credit such account as directed by the Bank, for the value of the PEMI, EMI and/or any other amount due.
The Bank shall apportion the monies credited to the account of the Borrower with its office as aforesaid towards repayment and payment of the Bank Loan and interest in accordance with the schedule of amortization and interest payments. Any amount deposited by the Borrower before the date on which it is to be appropriated for repayment or payment or any amount due to it shall be appropriated by the Bank towards repayment and payment of amounts due only on its due date.
b. Cost and Expenses
The Borrower shall additionally pay , forthwith on demand to the Bank all costs between legal counsel and clients on a full indemnity basis incurred and/or to be incurred by the Bank in connection with the investigation of the title of the property, valuation of the property, preparation, execution, performance, enforcement and realization of the Loan, security documents and other instruments executed in pursuance hereof as also charges for Standing Instructions, Electronic Clearing System (ECS), salary deductions.
The Borrower shall pay to the Bank a charge not exceeding Rs. ____ /- for dishonour of any cheque given by the Borrower. If payment is delayed beyond ___ days from the due date of the repayment or actual date of presentment such cheque, the Borrower shall be liable to pay penal charges at the rate as specified in the schedule, on the amount of overdue EMI / PEMI.
c. Assignment
The Borrower, his heirs, legal representatives, executors, administrators and successors are bound by the terms of this agreement. However the Borrower shall not be entitled to transfer or assign any of his rights and obligations under this agreement. The Bank shall be entitled to sell, assign, securities or transfer the Bank rights and obligations hereunder to any persons of Bank’s choice in whole or in part and in such manner and on such terms as the Bank may decide. Any such sale, securitisation, assignment or transfer shall conclusively bind the Borrower.
d. Sharing of Information
The Borrower hereby authorizes the Bank or its subsidiaries/ affiliates and their agents to exchange, share or part with al the information relating to the Borrower’s loan details and repayments history information and all information pertaining to and contained this Agreement to affiliates/subsidiaries of the Bank/ Banks / Financial Institutions / Credit Bureaus / Agencies / Statutory Bodies as may be required and undertakes not to hold affiliates / subsidiaries of the Bank and their agents liable for use of the aforesaid information.
e. Service of Notice
Any notice or request to be given or made by a party to the other shall be in writing. Such notice or request shall be deemed to have duly received by the party to whom it is addressed if it is given or made at such parties address specified below or at such address s such party shall have designated by notice to the other party giving such notice or making such request.
FOR ____________ Bank: Address of the Bank
Effective Date of Agreement:
This Agreement comes into force from the date mentioned in the schedule and shall remain in force and effective until all the monies due payable to the Bank under the Loan as well as under other Agreements.

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