Important Things You Should Know Before Taking a Home Loan
Nov10

Important Things You Should Know Before Taking a Home Loan

Realty trend – buying a home on loan! With easy availability and multitude of financing options, purchasing a home has come within the reach of more and more people today. However, a home buying decision depends majorly on the amount of loan that you can avail of. A home loan is perhaps one of the biggest expenses of your lifetime, and therefore, you should make sure that it is done right. It is important to understand that procuring a home loan is easier said than done. You might be baffled by advertisement gimmicks and enthusiasm of banks to lend, but getting a home loan sanctioned is tedious. Furthermore, it is also important to be well-acquainted with how home financing works; otherwise, it can bring horrible surprises later. Discussed here are some important things that you should know before taking a home loan. After all, there’s no harm in being well-prepared before you sign on the dotted line in that contract paper. Eligibility for Home Loan Home loans are available for constructing a house, buying a new home or upgrading an existing one. The eligibility criteria to procure a home loan vary from one bank to another, though there are certain parameters that remain constant. To get a home loan, one must be an Indian citizen within the working age and must have a minimum annual income of INR 1.5 Lakhs. However, the threshold limit varies among banks. There are several factors that are considered in determining eligibility of a home loan buyer. A basic way of determining loan eligibility is by calculating The Equated Monthly Installment. Typically, banks limit EMI at 40-50% of the borrower’s salary, which only includes basic pay plus dearness. Allowances and reimbursements are not considered here. Moreover, if you have existing liabilities, the eligibility further goes down. For this, banks take into consideration credit score of the borrower before lending home loan. The credit report reflects your credit worthiness – your existing loans and other liabilities such as credit card, your EMI payments (whether paid regularly and in full amount), default in repayments, and other information such as written off, settlement. The lower the credit score, poor is your credit worthiness. Your financial strength is another important factor that is considered here. For instance, a person with a steady source of income can easily get a loan as compared to a self-employed who have an erratic earning record. Your age also defines your earning years and thus, your repayment capacity and tenure of the loan. For home loans, banks also need borrowers to have a guarantor. Cibil score and repayment capacity of the guarantor is...

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Top-up Loan – A Blessing for Existing Home Loan Customers
Apr23

Top-up Loan – A Blessing for Existing Home Loan Customers

Planning to buy a house or apartment, or planning to renovate or refurnish a recently bought house? Well, if you are an existing home loan borrower with a bank, you have a great facility to support your plan.  It’s the top up loan. A top up loan can help you meet some of your big expense- be it home renovation, education, marriage  or any such expense at a relatively lower interest rate than a personal loan. It is available only to an existing home loan customer. A top up loan is an additional amount of loan that you can borrow on your existing loan facility with a bank to meet some major expense. You can avail this loan only if you are an ‘existing home loan borrower’. As the name suggests, this loan is meant to top-up your existing home loan amount and it can be availed only after a few years of having taken the home loan. For instance, some banks give you a top up loan only after you have repaid your loan diligently for at least one year; whereas some banks give this loan 1-2 years after the possession or completion of the property financed. The bank will analyse the market value of your property, the amount of outstanding loan, your loan repayment history, and your present financial condition before approving your top up loan. The tenure of a top up loan can go up to 15 to 20 years, depending on what’s the term of your home loan, maximum tenure being as same as the balance repayment period. Since the tenure of this loan is usually long, you can have the benefit of easy EMIs that can be comfortably adjusted in your monthly budget However, it is the bank which, after doing its own evaluation, decides the amount and the maximum tenure of a top up loan a customer can avail. Eligibility – Who can Avail and How Much You can take a top up only when you have a home loan to top up on. The conditions for availing a top up loan varies from bank to bank. Sometimes, you have the option of taking a top up loan from the same bank which had initially facilitated your home loan. However, there is no guarantee that the same bank will support your application for a top up loan. But, there is nothing to worry as an alternate way is also there if that’s the case. You can always shift the home loan from the previous bank to a different bank, a bank that is willing to give you a top up loan. However, the...

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Home Loans
Feb03

Home Loans

Information on Home Loans: One of the resolutions for a buyer this year is to possess an apartment in Delhi NCR with all the world class facilities at par with international standards. But sometimes financially the individual may not have the budget or the previous budget doesn’t match the refreshed prices of the property. To meet this ever price changing scenario in the real estate industry, home loans have become popular over the period of time. When you want to buy a residential home, it’s a big financial decision for an individual personally. There are many factors you have to consider before taking a housing loan and consider the impact it will have on your personal account: Impact of loan on personal finance: It’s very important to understand the bearing caused when you take a loan and the subsequent EMI’s one has to pay from the monthly earnings. Hence the liability of taking a loan and then repaying it back with interest is a huge responsibility for an individual. Eligibility: It’s very important that you know whether you meet the criteria of applying for a housing loan since that’s the only thing a bank will consider. Some of the important documents an individual is required to submit while applying for a loan are:  Salaried Customers Self Employed Professional  Self Employed Non Professionals:  Salaried NRI’s  Self-employed NRI’s Application form with photograph duly signed by all applicants Application form with photograph duly signed by all applicants Application form with photograph duly signed by all applicants Application form with photograph duly signed by all applicants Application form with photograph duly signed by all applicants Identity, Residence and age proof Identity, Residence and age proof Identity, Residence and age proof Cop of valid passport showing visa stamps Copy of passport along with valid visa stamp PAN Card copy of the main applicant PAN card copy of the main applicant PAN Card copy of the main applicant Copy of valid visa/work/permit/equivalent document. Supporting NRI status of proposed account holder Trade license or equivalent document Last three months’ salary slip Educational qualification certificate and proof of business existence Proof of business existence Latest contract copy evidencing salary/salary certificate/wage slips Computation of income, P & L account and balance, Certified by the CA/CPA, or any other relevant authority Form 16/Income Tax Returns Last three years income tax returns with income computation Business profile Overseas bank account statement Six months overseas bank account statements and NRE/NRO account Six month’s bank statements Last three year’s CA certified/audited balance sheet and profit & loss account Last three year’s income tax returns with income computation. Last three years’ CA audited...

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