Buying a house of your own is no more a tough task as home loan allows you to borrow a lump sum amount and purchase your home without affecting your financial stability. The loan can be availed at fixed or floating rate.
Banks offer the loan amount based on your monthly income and the value of the property. They will give you max amount in which your EMI of home loan and others loans is 50-60% of your income. Other factor is value of that property.
The borrower’s eligibility of getting a housing loan depend upon his/her repayment capacity & the banks establish this repayment capacity by considering various factors such income, spouse’s income, age, number of dependants qualifications , assets, liabilities, stability and continuity of occupation and savings history. Eligibility Factors in Housing loan Your Home Loan eligibility is determined by your repayment capacity and the value of the Property
- Spouse’s income
- No. of dependants
- Stability and continuity of occupation
- Savings history.
The most important concern of banks in determining your loan eligibility is that whether or not you are contentedly able to pay off the amount you borrow.
The Second factor is the value of the Property.
Banks are okay to fund 75-85% of property value but with the condition that you have income capacity that you can pay its Emi each month.
Home Loan Eligibility Criteria
Before applying for a home loan, check the eligibility criteria as it may vary from one lending institution to the other, but there are some common requirements:
- Any salaried, self-employed or business person with Indian nationality can apply for a home loan.
- You must be aged 21 years or above.
- You should have a regular source of income for timely repayment of the loan.
- Your professional stability and savings history will help in quick loan approval.
- Ensure that you do not have bad credit history for at least the three months prior to applying for a home loan.
- If you are a salaried professionals, about 40% of your monthly gross income can be availed as loan amount.
- For self-employed individuals, profit earned by you majorly determines the loan value you are eligible for.
The eligibility criteria for different class of borrowers in terms of age is
Home Loan Eligibility Calculator
With home loan eligibility calculator, you can know the amount of loan you are eligible for on the basis of your monthly income, existing EMI, rate of interest and loan tenure. You can check the housing loan calculator at rupaiyavasool.com and know the amount you can get from the lending institution or the bank.
Rest, the final amount is also influenced by your credit score.
In order to be eligible for a home loan, you need to be
- Salaried individual, or
- A self-employed individual/ professional.
You must satisfy the age and income requirements and be able to demonstrate a stable income.
If your spouse is salaried, then you can add him/her as a co applicant and this income will be considered while determining your eligibility for the loan.
Home Loan Fees and Charges
Every loan has a costs attached to it like Processing Fees or Administrative fees which are non refundable, Legal fees payable to the lender or to the legal consultants of the lender, Stamp duty on creation of mortgage, etc.
Foreclosure charges are applicable only on fixed rate loans taken from bank, whereas housing finance companies levy prepayment penalty only on fixed rate loan if prepaid from other than own sources.
Home Loan Eligibility:
Home loans are secured advances and therefore theeligibility criteria for these loansis laid out differently by different banks. Here are some of the most important factors that feed into determining home loan eligibility criteria for almost all banks in India.
- Age:The minimum age at the time of application should be 21 years. Repayments have to be completed before the age of 60 or 65.
- Employment:Ability to service interest charges, as reflected in the borrower’s earning capacity, is important. Borrowers should:
- Be salaried employees or self-employed persons (professional/non-professional)
- Have been in employment/business for at least 3 years of which current employment should account for at least 1 year.
- Income:A minimum income varying between Rs.5 – 7 lakhs would be required. This depends on the nature of employment i.e. salaried or self-employed.
- Residence:At least one year of stay at the current residence is required to display stability with respect to employment as well as financial. This is an indirect indicator but is taken into account by almost all banks while calculating home loan eligibility.
- Credit Rating:A good credit score is required (a score of 750-900 from CIBIL is considered good). Besides this, a healthy financial background is vital for approval and to determine the interest rate and loan amount.
- Parallel debt channels:While sanctioning home loan to customers, banks also look into the current credit standing of the loan applicant. If a borrower has other home loans, personal loans or car loans in-progress then the lending entity calculates the loan quantum eligibility accordingly. Banks do this to make sure that the loan applicant is able to pay the minimum monthly installment towards his/her home loan.