What is the process of applying for a home loan
Housing is one of the most basic needs for humans along with food and clothing. Every youngster strives to build a house and makes it the first priority. Housing is a major investment that allows a family to cut down on much other expenditure. The potential homeowner must first look out for the family’s monthly income and then look out for a loan which is generous so that he need not spend his entire life repaying the loan.
Compare Interest rate and apply for home loan. For obtaining home loan you should meet eligibility criteria and required documents needs to be submitted.
Required Eligibility for Home Loan
- Employment Stability:It’s a crucial aspect for home loan consideration. Unless the applicant is salaried and employed for at least 2 years in the current profession or if the applicant is self-employed with minimum 5 years of total earnings loan will not be processed.
- Age Criteria:The younger the applicant is there is more probability of getting loan. Most banks offer home loan for salaried employees only if they are between the age group of 20 to 60 years. However for self-employed this will change to 24 to 65 years.
- Credit Rating:Apart from the applicant’s company’s performance, individual credit rating has a lot of importance. Good credit rating will increases the chance of getting the loan with more flexibility on loan amount, EMI, tenure and interest rates. Default payment records, fraudulent tracks, and outstanding loan, will reflect negatively on the applicant, this could lead to bank’s cancelling the loan request or will charge high rate of interest.
- Employer:If the applicant is working with an employer who has high reputation and impressive turnover, the credibility of the applicant will respectively increase. Being a part of reputed and high turnover companies is an asset for the applicant especially when it comes to applying for home loan.
Financial Situation: For this factor, not just present status is considered, the past records of financial stability holds lot of value in deciding the eligibility for home loan. It is a key to success in all fields if you have good financial records, this can decide the interest rate percentage, loan amount and tenure when applying for loan.
Documents Required for Home Loan
- Complete Home Loan Application Formwith one passport size photograph.
- Photo Identity Proof:Passport/ Driving License/ Voter ID/ PAN
- Residence Address Proof:License/ Registered Rent Agreement/ Utility Bill
- Residence Ownership Proof:Sale deed or rental agreement
- Income Proof:salary slip, bank statement and Form 16
- Job Continuity Proof:Appointment letter at employment and validation letter from HR
- Bank Statement:Past 6 months’ document
- Property Documents:Sale deed, Katha, transfer of ownership
- Advance Processing Cheque:A cancelled cheque for validation of bank account
- Investment Proof:LIC, mutual funds, property document etc.
- Financial Documents:
- For Salaried Individual:3 month salary slip, Form 16 and bank statement
- For Self-Employed Individual:IT returns for last 2 years along with computation of income tax for past 2 years certified by a Chartered accountant
- For Self-Employed Non- Professionals:IT returns for last 3 years along with computation of income tax for past 2 years certified by a Chartered accountant
Here you just have to update your details such as current Company, take home salary, existing EMI amount, Salary account bank, loan requirement and tenure, and it will auto-calculate the amount that should be paid per bank interest rates, its processing fees, etc. Once this information is available, it helps you to decide the bank you wish to avail home loan, Bank officials will contact you directly to make your interest executed.
Make use of this information while deciding to go for a house loan. House loans in India are a great way to turn dreams into reality. Also make use of this option to avail tax deductions. Enjoy living in the new property with striking a best home loan deal!
