If you intend to buy a house and fall short on funds, a home loan offers a helping hand. It is the most sort-after option to finance housing needs. Banks and financial companies provide it at competitive interest rates based on their policy and your eligibility. These offers differ for every individual because there are many factors taken into consideration.
You should know if you qualify based on your needs and eligibility instead of the standard offerings. Lenders provide a tool called the home loan eligibility calculator to help you ascertain this. It shows you the exact amount you get according to your requirements and profile.
The following FAQs should help you understand more about it:
What documents to submit for the home loan application?
You are required to provide supporting paperwork to back up your eligibility. These include two to three passport-sized photos, identity proof, income documents, address proof, property papers, bank statements, etc. This differs for a salaried and a self-employed individual as the means of earning changes for both.
Can I still apply for the loan if I have a low credit score?
The credit score is an indication of your debt behaviour. It lets the lenders know about your repayment pattern. It provides them with the assurance needed to calculate home loan eligibility. Hence, a lower credit ranking makes you a high-risk borrower, and you might face rejection. However, you can improve the score by clearing your dues before applying.
How much loan amount can I expect?
The loan amount sanctioned to you gets based on your eligibility for home loan. Hence, it differs for all home loan applicants. Lenders evaluate your financial standing, age, income, credit rating, etc., to finalise the same. However, the standard amount offered is up to 80-85% of property valuation.
Can I get a home loan despite other existing loans?
Yes, you can, as there is no restriction on this aspect. However, if your existing equated monthly instalments amounts to a large number, it reduces your chances of approval. This is because lenders question your repayment capacity with the increased income distribution. It is best to pay off as much as possible for getting better home loan deals and approval.
How does the home loan eligibility get determined?
Banks and financial institutions use their set parameters for judging home loans eligibility. The common factors include your age, income, employment status, financial stability, credit history, etc. You can quickly check your eligibility through the tool provided on their websites. It shows you a customised result unique to the data you input.
How much interest rate is charged on home loans?
The home loan interest rates differ for every applicant. It depends on your eligibility. The standard quotations given by lenders is to provide an idea of their offers.