How to Start a HOME LOAN

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Home Loan Overview

A Home Loan is a financial product that allows individuals to borrow funds from a bank or financial institution for the purpose of purchasing, building, or renovating a property. The loan amount is typically secured by the property itself, which means that if the borrower fails to repay the loan, the lender has the right to claim the property.

Home loans come with various terms and conditions, including interest rates, repayment periods, and specific eligibility criteria. These loans help individuals achieve their dreams of homeownership by making it possible to spread the cost of purchasing or constructing a property over an extended period, usually 15 to 30 years.

In India, home loans are available with flexible repayment options, competitive interest rates, and government subsidies for first-time homebuyers. Lenders assess the borrower’s eligibility based on income, credit history, and the value of the property.

Key aspects of a home loan include:

  • Loan Amount: The total amount of money borrowed.
  • Interest Rate: The rate at which interest is charged on the loan amount.
  • Repayment Period: The duration over which the loan is to be repaid (usually between 10 to 30 years).
  • Eligibility Criteria: Factors such as age, income, credit score, and the value of the property that determine whether an applicant qualifies for the loan.

By securing a home loan, individuals are able to purchase their dream homes or invest in property, while repaying the loan amount over time with manageable monthly installments.

Features and Benefits of Our Home Loan

We partner with leading institutions to offer you the best home loan rates, ensuring competitive interest rates and affordable EMIs.

  • Home Construction Loan: If you own a plot of land but lack the financial resources to build your dream home, a Home Construction Loan can help. This loan is designed for constructing or majorly repairing your property.

  • Home Extension Loan: Already own a home but need more space? A Home Extension Loan allows you to extend your current property, add an annexe, or build an additional floor.

  • Home Improvement Loan: Enhance your living space with a Home Improvement Loan. Whether it's upgrading your furniture, fixing electrical systems, or renovating rooms, this loan covers all your home improvement needs.

  • NRI Home Loan: If you're a Non-Resident Indian looking to invest in property in India, an NRI Home Loan offers you the ideal solution, though with a few additional formalities in the application process.

 
 
 
 

Home Loan Eligibility Criteria

To qualify for a home loan, the following eligibility criteria must generally be met. While these may vary slightly depending on the lending institution, they provide a basic guideline for assessing your eligibility.

Eligibility Criteria Salaried Person Self-Employed Person
Age 21 years to 58 years at the time of application 25 years to 65 years at the time of application
Income Minimum ₹10,000 per month Minimum ₹2,00,000 per year
Employment Type Must be employed with an MNC, or a private or public limited company Must have at least 3 years of experience in the current field
Work Experience Minimum 2-3 years of experience in the current organization Minimum 3 years of professional experience
Credit Score 750 and above is considered a good credit score 750 and above is considered a good credit score

Detailed Eligibility Breakdown:

  • Age Criteria:

    • Salaried Person: You must be at least 21 years of age when applying for the loan, and not older than 58 years at the time of loan repayment.
    • Self-Employed Person: The age requirement starts from 25 years, and you must be below 65 years when the loan matures.

  • Income Criteria:

    • Salaried Person: A minimum monthly income of ₹10,000 is required for loan approval.
    • Self-Employed Person: You must have a minimum annual income of ₹2,00,000.

  • Employment Status:

    • Salaried Person: A stable job with a minimum of 2-3 years of work experience, preferably in multinational companies (MNCs), or private/public limited companies.
    • Self-Employed Person: A minimum of 3 years of experience in the same industry or field is required.

  • Credit Score:

    • Credit Score: A credit score of 750 or above is considered ideal for home loan approval. A higher score indicates responsible financial behavior, improving your chances of loan sanction.

Additional Considerations:

  • Property Type: The property you wish to purchase, construct, or renovate also plays a significant role in determining loan eligibility. Lenders typically prefer properties that are residential and ready for occupation.
  • Repayment Capacity: Your ability to repay the loan will be assessed based on your income and other financial commitments. Lenders may calculate the Debt-to-Income (DTI) ratio to gauge your ability to repay the loan comfortably.

Meeting these eligibility criteria enhances your chances of securing a home loan with favorable terms and conditions.

Home Loan Documentation Requirements

When applying for a home loan, you will need to provide various documents to verify your identity, income, property, and other necessary details. The documentation required varies based on whether you are a salaried individual, self-employed, or a Non-Resident Indian (NRI).

1. Documentation for Salaried Individuals

  • Income Proof Documents:
    • Form 16 (issued by your employer)
    • Employee Identity Card (for identity verification)
    • Last 3 months' Salary Slips
    • Last 6 months' Bank Account Statements
    • Proof of Employment Duration (for example, joining letter, confirmation letter)

2. Documentation for Self-Employed Individuals

  • Income and Business Proof:
    • PAN Card (for identity verification)
    • Trade License (for business verification)
    • Partnership Deed (if applicable)
    • Articles of Association (for company structure details)
    • Memorandum of Association (if applicable)
    • Import Export Code (IEC) (if applicable for export/import businesses)
    • SEBI Registration Certificate (for investment businesses)
    • ROC Registration Certificate (for business registration with the Registrar of Companies)
    • Audited Financial Statements by Chartered Accountant (CA)
      • Profit & Loss Statement
      • Balance Sheet
    • Last 6 months' Bank Account Statements
    • Professional Practice License (for professionals such as doctors, consultants, etc.)
    • Business Establishment Registration (for shops, factories, and other establishments)
    • Business Address Proof

3. Documentation for Non-Resident Indians (NRI) Applicants

  • Income Proof Documents for NRIs:
    • Income Proof (similar to Indian salaried or self-employed individuals)
    • Property Papers:
      • Sale Deed (for property purchase)
      • Stamped Agreement of Sale (if applicable)
      • Allotment Letter (if purchasing from a builder)
      • No Objection Certificate (NOC) (from Housing Society or Builder)
      • Possession Certificate (if applicable)
      • Land Tax Receipt (for property verification)
      • Construction Cost Estimate (for home construction loans)
    • Bank Account Statement (to show payments made to seller/builder)
    • Payment Receipt (proof of payment to seller/builder)
    • Resale Property Documents:
      • Share Certificate (in case of resale property)
      • Occupancy Certificate (for newly constructed properties)

These documents help the lender verify your financial and personal information, and ensure the legitimacy of the property being financed. Always ensure that all documents are current, authentic, and clearly legible to avoid delays in your home loan application process.

Home Loan Fees and Charges

The fees and charges associated with home loans can differ depending on the lender and the specific terms of the loan. Below is a general breakdown of the common fees and charges that borrowers may encounter:

Particulars Charges
Loan Processing Fees 0.25% to 2% of the loan amount
Loan Cancellation Fees 0% to 5% (depends on the bank/NBFC)
Stamp Duty Charges Based on property value and state tax
Legal Fees As per actual costs incurred
Penal Charges Typically 2% per month
EMI/Cheque Bounce Charges Approx. ₹500 per instance
Other Charges Documentation charges, verification charges, duplicate statement fees, NOC certificate charges, and swap charges

These fees and charges may vary based on the financial institution, the loan amount, and the specific terms of the loan agreement. It's always recommended to carefully review the fee structure before finalizing the loan.