Nowadays, with the recent developments in the Indian economy, more and more first time buyers are looking to buy a home, in order to do the same, one need to apply for a home loan made available from various banks and NBFCs. However, getting the desired amount of money from a home loan depends on a variety of things like the overall income, other loans and balances and others. Here we have discussed a few things to keep in mind when opting for a home loan for the first time:
Earnings per month
Your ability to repay the loan and timely EMI payments will be determined by your monthly income. For salaried individuals, monthly income is the determining factor; for self-employed people, yearly profit is the determining factor. A borrower’s net income is the primary factor in determining the amount of a loan. Home loans may often be up to 60 times the borrower’s annual income. For example, if you earn Rs. 30,000 a month, you may be eligible for a loan of around Rs. 18 lakhs.
If you’re currently paying an EMI for any kind of loan, this amount is based on what you have left over of the ongoing loan account. After calculating the overall amount to be repaid and deducting the same from the EMIs you’re paying every month, then it helps the lender to figure out if an individual qualifies for a home loan in the remaining value.
Attributes of a Property
Banks often offer up to 85% of the value of a pledged property as collateral for a loan. To put it in another way, the maximum amount of loan you may avail to buy a house worth Rs. 50 lakhs is 85% of the entire value, or Rs. 42.50 lakhs. Before taking a property as collateral for a loan, banks look at a variety of other factors. For example, banks demand a certain amount of carpet space or built-up area in an apartment before accepting a loan application. If the property is a builder property, the bank will also take into account the builder’s reputation, as well as the age and location of the property. Whether the property is disputed or a freehold, the banks perform their own checks to make sure there aren’t any encumbrances on the bank.
Term of the Loan (Years)
One of the most critical aspects to take into account when taking out a mortgage is your credit score. For the most part, it pertains to the amount of time for which you want to avail a loan i.e. the tenure of loan repayment. The rate of interest will be comparatively lesser and also the EMI will be lower when the term of the loan is extended.
Inflation Factor (in percentage)
Many banks now offer home loans, including both domestically owned and privately owned institutions as well as the international ones. Depending on the borrower’s profile, each bank has a varied rate of interest. As a result, it is imperative that one can do their research on the interest rates of numerous lenders before choosing one. To get an accurate comparison, it’s best to double-check all of the pertinent information up front.
Qualifying loan amounts
It is called the eligible loan amount for which you are eligible as provided by the lender. The maximum loan amount which is approved by a financial institution directly depends on an individual’s profile as well as the value of the collateral that is being pledged.
In order to determine the amount of the loan, the credit history of an individual is considered to be very important. The credit-bureau collects credit information of all users from various credit card issuers and then processes this data to provide a customer’s credit score. The individual’s credit score is based on information received from these reports.
The borrower’s age is a significant factor in evaluating whether or not they are eligible for a home loan. To apply for a loan, a person must be at least 21 years of age. When it comes to retirement, the maximum age limit might range from 58 to 65, depending on the individual’s organization. Also, the loan’s tenure and EMI are also based on the borrower’s age.
Co-borrowing with your spouse or other family members might help you qualify for a loan by boosting your qualifying income. Co-borrower applications boost your chances of getting approved quickly and easily. Only specific kinds of connections can be co-applicants, however, according to the rules of the banks. Friends and family members who are not related by blood are ineligible in this group.
Before you begin searching for your ideal home, you should know how much money you are qualified for in a home loan depending on your earnings. Using this information will assist you in making a budgetary selection regarding the property you intend to acquire. You can easily calculate your own by using the home loan eligibility calculator. Fill out an inquiry form on once the property has been purchased and you will be contacted by our expert. This page can be used to learn more about the terms of a house loan or to gather the documentation required to apply for one.