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Home loan eligibility - Understand documents required to be eligible

Are you planning to opt for the housing loan to buy a home of yours or a land to build a new home? Here's all you need to understand about the home loan eligibility documents required to pursue the loan.

Express Paisa 2 Stories

Monday July 24, 2017 , 2 min Read

Home loan is most popular loan amongst all the loans since past few years. Also known as housing loan, it grips and supports to fulfill the following purposes:

• Purchase of a new home

• Land for building the house

• Renovating the existing home

• Construction of floors on an existing home

• Transferring already existing home loan.

Features of a home loan:

• It is a secured loan, vanishing away the biggest thing to worry when it comes to buy a loan.

• Second most vital element – the interest rate, is comparatively lower.

• Third most essential factor – tenure for repayment, is longer. It ranges from 5 years to 30 years.

• It allows you to apply jointly with your spouse, family members or any other as co-applicants. Thus while repaying it gets distributed with your partner in loan.

• Prepayment is also made feasible.

• Payment can be done through EMI.

• Bank has the margin of approx. 20%.

• As per the provisions of the IT Act 1961(which is subject to change), tax benefits can be availed on the home loan.

Eligibility criteria for applying for a home loan vary from lender to lender depending upon their policies of practice. But there are some conditions to be considered in a broader sense which are perceived in common by every bank. A few of them are briefed below.

• Age of the applicant – 21 to 65 years.

• Average net annual income is well-thought-out which shows a discrepancy from bank to bank. It ranges from 10, 0000 to 7 lakhs.

• The applicant must either be salaried or at least self-employed.

• If he is employed, the tenure of work should be of 1 year currently and 2 years if worked at some other place earlier.

• The current residence must have completed 1 year of time period.

• The reason behind rise in trend of home loan can be considered as increasing interest among people to buy their own house. Today every other person has a dream to build his own house. In fact it has been a matter of prestige since ages. But affording a home in this expensive world is nearly impossible. Taking a home loan and then stepping ahead with the dream of ‘My House’ helps the dream come true, in a lesser time period.