Do you know what is a step-up home loan? What are its advantages? Why is it better than a regular home loan from your bank?

Also, do you know what are top up loans and second charge loans? Which are the banks that offer you a second charge loan?

In a chat with Get Ahead readers on July 31, home loan expert Harsh Roongta answered these and several other queries related to home loans.

For those of you who missed the chat, here is the transcript.

Part I: Problem with your home loan?

Dhanaji asked, Which bank gives loan at low interest rates?

Harsh Roongta answers, This is a myth. If there were one single answer to your question, all other banks would need to shut their operations. The best bank for you depends on your profile and needs. There is no alternative to looking around in the market and making the banks compete for your loan to find out the best possible deal (not just the best possible rates) on home loans.

sumit asked, I have taken a home loan of Rs 9.5 lakhs from HDFC [Get Quote]. My EMI @ 11 per cent floating rate is Rs 10,300 for 18 years. What happens if I prepay some loan amount? Whether EMI reduces or tenure of loan reduces?

Harsh Roongta answers, That is your choice but, by default, the bank normally reduces the tenure rather than the EMI.

Vipps asked, My mother is a retired service woman and stays in a different city. I am staying in her 2BHK house and paying rent to her. She would like to construct a room in her house. Can she get a home loan for the same and can she also get the IT rebate for that?

Harsh Roongta answers, She can get a loan provided her disclosed income justifies the amount of loan that she desires. Given that she is retired, the loan tenure will also normally be low (around five years). Hence, the overall loan eligibility will be low. But she will definitely be able to get tax benefits on such loan repayments.

venkat asked, Hello sir, I have one home loan, if I want to take another home loan is it possible to take, if my salary is eligible sir?

Harsh Roongta answers, Of course it is possible. You will also get tax benefits on both the loans. See the detailed answer on this link: http://www.apnaloan.com/taxtips/home-loan-india/deductiononmorethanoneproperty.html.

Sriram asked, Hi Harsh, There was real estate boom in Chennai, when I lived there and the home loan rates have also soared. Is it wise to wait for some more time for prices to reduce?

Harsh Roongta answers, That depends on the purpose for which you are planning to buy the home. If it is for own residence, then you should have a longer-term outlook and need not necessairly try and time the investment. If, on the other hand, it is for investment purposes, then I would advise caution.

vrushali asked, Hi Harsh, If I already have taken a home loan, then after how much time I can take another home loan?

Harsh Roongta answers, There are no time restrictions as long as your income can justify the second loan as well.

vandana_shukla2001 asked, My husband and I have taken a joint home loan. The interest paid for the year is around Rs 2.6 lakhs. Please let me know that whether we individually can take tax benefit of Rs 1.5 and Rs 1.1 lakhs or there is a upper limit?

Harsh Roongta answers, Assuming you are using the house for self-occupation the individual limit for claiming the deduction for interest is Rs 1,50,000. The deduction will be shared between the two of you in the ratio of your share in the loan. The limit of Rs 1,50,00 will be separately available to both of you (which means overall deduction will be higher than Rs 1,50,000.

NASH asked, What is step-up loan?

Harsh Roongta answers, A step-up loan is one where the repayment is low in the beginning and then increases after a couple of years. It is very suitable for young professionals in the early part of their careers whose incomes rise very fast in the future. The step-up loan allows them to get better eligibility for loans much earlier in their careers as compared to regular loans.

Milan asked, Will I avail tax-benefit if I take a loan from my near-relative? If yes, then what are the formalities to be done between my relative and me?

Harsh Roongta answers, Only interest is deductible, not the principal payment.

mb asked, Hi Harsh, We are a group of 10 and are planning to build apartments for ourselves together. Could we get loans from bank for this?

Harsh Roongta answers, Yes, that may be possible, though not as easy as all of you buying from the same builder. The risk that the bank will evaluate is the construction risk or, in simple English, the risk that the project may not get completed on time due to lack of technical expertise or due to differences between the members.

deepak asked, I am planning to take a home loan from my employer on discounted interest rates. Will I be eligible for tax rebate?

Harsh Roongta answers, Assuming your employer is a company, you will be eligible for the same tax benefits as if you are taking from a bank.

ABUBACKER asked, I HAD BOUGHT A FLAT FOR RS 5,75,000 OUT OF RS 5,12,000 I HAD TAKEN A LOAN FROM HDFC. NOW THE PROPERTY HAS APPRECIATED TO RS 7,35,750. I WANTED TO DO A TOP UP FOR THE REMAINING AMOUNT. IN SHORT I WANT TO INCREASE THE LOAN AMOUNT & CLAIM FOR TAX BENEFITS.

Harsh Roongta answers, Tax benefits on the top-up loan may not be available unless you are using the top-up loan for acquisition/ construction/ repair/ renewal or renovation of the house property.

shashishekhar asked, Hi! I'm a Central Govt executive. I've got a home loan of Rs 8 lakhs from IDBI. My deptartment is willing to sanction advance for Rs 4.5 lakhs. For the rest of the amount I require to apply for the second charge elsewhere? How and where is it possible? Can you guide me through this? Thank you.

Harsh Roongta answers, Second-charge loans are normally possible only fom select banks who will have an specific arrangement with your employer. Normally, HDFC has such loans but check with your HR department whether they have such tie-ups with any bank in this regard.

Harsh Roongta says, Ok folks. Many thanks for this extremely interactive chat. I think if you go through the chat transcript you will find that most of the questions have been answered. See you on the next chat.

Part I -- Problem with your home loan?