Home loan rates, be they floating or fixed are on the rise once again.

Should you withdraw from your PPF account to repay that costly home loan? Are interest rates likely to fall in the near term?

You have work experience of less than two years. Will your home loan application be processed by any bank?

Home loan expert Harsh Roongta threw light on such matters during a chat with Get Ahead readers on February 13.

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

Part I: The right home loan?

nareshkumar asked, Is it possible to purchase a flat in my brother's name, as I have heard that banks normally encourage this?

Harsh Roongta answers, Not all banks will allow brothers to be co-owners and co-borrowers for a flat. But check around before you take a call.

savita asked, Hello Sir, I have taken a floating rate loan at 9.25% for 20 years around 4 years ago.In between the floating rates were slashed & we all enjoyed the rates upto 7%.Now there is a steep rise in the rates and it is heard the rates will still rise.so I am in a fix as to take out money from PPF and close the account? or wait and watch? Kindly suggest.

Harsh Roongta answers, It is never a good idea to withdraw money from your PPF account to repay a debt. The post tax cost of a home loan (assuming you pay tax at a high rate) is still lower than the post tax return on your PF depsoits.

siva asked, Sir, what is your view on interest rates? Will they come down or go-up?

Harsh Roongta answers, This answers several similiar questions. NOBODY CAN PREDICT INTEREST RATES. Having said that the outlook for the next few months is that the interest rates might rise further. But one thing that must not be forgotten is that INTERST RATES LIKE ANY OTHER PRICES MOVES IN CYCLES. We have seen a pronounced downward wave from 2000 till early 2004 and a sustained rise after that. It is only a matter of when (not if) the interest rates will move down again.

bejoy asked, bejoy here: I took a home loan in April 2005, I got the possession on my house this month. The house/loan was shared on a 50-50 partnership with my wife. As I will be claiming tax exemption from this financial year, can I get exemption on 1/5th of 50% of the principal paid in the year 2005-2006 as in the case of interest?

Harsh Roongta answers, Principal paid in the year in which the construction was not yet complete is lost forever.

indira asked, We (me and my husband) had taken a loan jointly at floating rate in 2003. Our total due amout is close to Rs 10 lakh now. Do you think it is advisable to repay some part of the amount- around Rs 5 lakh to minimise the risk of rising interest rate?

Harsh Roongta answers, If you have the money to spare it is a good idea. However you should normally carry out a needs and return analysis before taking this decision.

Arun asked, I have two flats one in Delhi and the other at Thane. However on a/c of my children's education I stay in a rented place at Navi Mumbai. Both my flats have been rented out. Can I claim HRA rebate on the rent paid by me?

Harsh Roongta answers, Already answered. Yes you can.

Mujtaba asked, Am an NRI from Dubai, I want to take a house in Bangalore, hence I need a loan of about Rs 20 lakh. Can you suggest is there any govt scheme available which benefit NRI's?

Harsh Roongta answers, There are no government schemes to provide loans to NRIs to buy homes. You can however get competitive offers from banks by asking around.

gopi_0103 asked, Hi Harsh. I am working for an MNC as a software engineer and my pay is around Rs 35k per month.I want to take a home loan. Can you first tell me how much I am eligible for and at what rate should I take floating or fixed?

Harsh Roongta answers, Based on your salary you should get a 20 year loan around Rs. 16-18 lakhs.

r.jadhav asked, Sir I want to buy house Around Bhaynder..Miraroad.... I have Just started working..... I am fresher...... I am earning Around Rs 1 Lakh PA. Will I get Loan? If yes, the how much will I get?

Harsh Roongta answers, Most banks require minimum work experience of around 2 years before they will consider a home loan application.

nagendra asked, Hi harsh we are having a property which is in my mother's name. She is house wife and I am the only child. We have taken home loan and I am repaying the loan amount. Can you please tell me whether I am eligible for tax benefits or not?

Harsh Roongta answers, Sorry only owners or co-owners are eligible for tax benefits. Since you are niether you will not be eligible for any tax benefits.

navin asked, I am an ex employee of Apnaloan .com. I have an existing home loan which I want to shift to money saver from ICICI Bank. I am ready to bear the transfer cost Would like to have your opinion on this.

Harsh Roongta answers, Hi Navin. Money saver accounts make sense only if you have surplus amounts lying around in your linked account.

ritanya asked, Sir, I've already taken a loan for my 1st house. I'm planning to buy another one. Can I get the loan again from bank?

Harsh Roongta answers, Yes provided the bank thinks you have enough income to service both the loans.

sajith asked, Does fixed interest rate really mean fixed or is it upto the bank to review it on a periodic basis ?

Harsh Roongta answers, Some banks have genuine fixed rate loans which remain fixed throughout the loan tenure no matter what happens.

Maheshd asked, Hi Harsh, with the steep increase in Home loan interest, will the real estate market fall down. I am interested in investing in real estate. Will I get enough returns in 2-3 years time? Should I invest in underconstruction or ready property?

Harsh Roongta answers, Real estate investment is a long term game. Unless you have an investment horizon of at least 7-10 years real estate investment may not work out for you.

Harsh Roongta says, Ok Folks. This chat was really very enjoyable - though my wrists are still paining. Sorry I could not answer all your questions. Goodbye till next time.

Part I: The right home loan?