Are you planning to buy home? Well, this is perhaps the single most important purchase that anyone makes in their entire lifetime. But owning a dream home has also become a basic necessity. Hence, securing a home loan is one of the most important finance decisions an individual would make. In the recent times, the lenders have increased their focus on lending; hence the home loan disbursal process has gained the momentum. But at the same time, a lender considers the number of loan defaulter, and who are unwilling to waive-off certain credit norms.
Today, typically a home loan varies from 10 to 30 years depending on several factors such as your age, the loan amount, your relationship with banks, etc. A borrower have the option to opt for home loan from banks, or any other financial institutions that not only help them with the best finance options but also help in the entire process of owning a home.
Home Loans Eligibility
Home Loan eligibility is largely dependent on various factors such as your occupation, your net month salary, credit history, number of dependents, etc. So, do you have any idea on how much loan amount you may be eligible for and an estimate of monthly repayments? Here we enlist some of the important parameters that lenders check out-
- Most of the banks consider your credit scores/CIBIL scores while setting your loan to value ratio (LTV). If a borrower is declared defaulter or who is possessing low credit scores carries a high risk of defaulter in loan repayments, lenders may reject the application. Thus, if you are planning to buy your dream home, just make sure you take out your credit score report and improve it, if necessary.
- Age and Job Profile matters a lot! The minimum age to apply for home loan is 21 years and the maximum age is 60 years. Usually, most of the lenders prefer that a borrower must complete their entire loan repayment by the time you turn 70 or loan maturity. That’s the prime reason that a borrower who is very near to his or her retirement is usually asked to make large contribution towards the purchase of their dream home.
- Co-applicants of lower age may not be of much help in the above mentioned case, as most of the lenders consider the age of the older co-applicants only.
- Work Experience- So, a bank wants to know that for how many years you are currently associated with the current company, and your overall experience. This is because the longer you serve the more points you earn.
- Type of occupation- Well, occupation is one of the important factor that lender take into consideration. There are some occupations that lenders prefer such as if a borrower works in a government bank or PSU employees as it tells about their job stability. After this, lenders prefer the employees working in blue-chip companies, or professionals like Doctors, CA’s etc. in reputed organizations. On the other hand, if a borrower who switch his or her company very frequently gives a negative impression.
- Net Monthly Income: Lenders consider your net monthly income to calculate your financial obligation to income ratio. The ratio reveals the proportion of your total income outgo towards servicing home loan EMI, and other payment obligations like house rent, insurance premiums, etc.
Documents Required For Home Loans
Well, these are some of the common documents that all the borrowers, either self-employed or salaried professionals have to introduce and submit it to the lender, such as:-
- Copy of PAN Card, first and last page of your Ration Card
- Recent Passport Size color photograph
- Residential Proof- Utility Bills such as telephone or electricity bills. Ensure that you have at least the last 3-6 months of utilities bills.
- Photocopy of your bank statement for the last six months. Just make sure that your bank statement does not reflect bounce Cheque or any other charges for not maintain a minimal balance. These actions can hamper your credit rating and ability to get a home loan.
- A bank separate home loan borrower into two categories i.e. salaried and self-employed. The paperwork may differ for these categories.