Owning a house is a big deal nowadays. Hence, a home loan is beneficial when it comes to buying or building your own home. There are certain things that need to be kept in mind if you want to know more about the whole process of buying your own home. Read further to know how much home loan amount you can be eligible for.
How to know if you are eligible for a home loan?
Wondering if you are even eligible for a home loan? You can find out with the help of the home loan eligibility calculator. This calculator makes sure you know the criteria as well as whether or not you meet the standard criteria required to get a home loan. To know if the applicant is eligible for a home loan, the calculations of a salaried /self-employed customer are done based on the applicant’s age, income, expected loan amount, loan tenure and the type of company they work for.
Tips to know before applying for a home loan
- You can enhance the eligibility of your home loan application by adding a co-borrower/ co-owner
- You can also opt for a longer tenure loan
- An additional source of income can strengthen your application as well.
Factors that determine your home loan eligibility
There are certain factors that determine your eligibility for a home loan; they are as follow:
Steps to take for a home loan
As mentioned above, there are several things you need to understand before you take a further step in this process.
With a few eligibility criteria already mentioned above, different banks have different requirements you need to meet if you want to choose them as your home loan provider. One of the essential requirements is credit history to know how often you tend to repay. The preferred credit score is 750, so make sure you have a tight credit score. Using a home loan eligibility calculator is also one of the ways to determine eligibility for a home loan. The eligibility is estimated considering various factors, including age, occupation, collateral security, income, etc. If you meet these requirements, you are considered for your home loan application.
- Pay the down payment amount after meeting your eligibility requirements.
Generally, the applicant is only supposed to pay 10-20% of the total amount as a down payment, but if you can afford to pay more, you can go ahead and do so. The rest can be arranged by taking a home loan from the bank or HFC. For cases when the applicant does not have 10% to pay as the down payment, they can take a soft loan from their friends, relatives or employers. But keep in mind that the lesser the borrowed amount, the lesser the burden of repaying.
- Check your affordability beforehand.
Before you finalize an amount you will be paying as your home loan EMI, make sure it doesn’t become a burden. The basic formula to keep in mind while paying the EMI is to look at your loan to income ratio, which should be 20-30% from your income. Don’t decide the EMI amount based on your future raise. And the rest will go easy for you.
These were the things you need to keep in mind if you are planning to buy your own house with the help of a home loan. Choose a trusted home loan provider and unleash your dream of owning a home.