Home loan eligibility - Understand documents required to be eligible
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.