Most of the Indian middle-class families dream of calling a house their home. However, they do not have adequate funds to purchase a home independently, thanks to soaring real estate prices. Here is where a home loan plays an important role. It not just covers 80 per cent of your property value but also provides tax benefits. However, not everyone is eligible for a house loan.
The housing loan eligibility varies from lender to lender. The primary focus is on employment, income, and credit score. Unless you do not pass these criteria, lenders do not approve of the loan.
- Age: Home loans in India have a different age limit for salaried and self-employed professionals. The basics are as follows:
- Salaried employees: Those who are employed in Government service or with reputed private companies can quickly get the loan. Applicant’s minimum age should be 20 years when the loan tenure begins. The maximum age limit is 60 years at the time of loan maturity.
- Professional individuals: Those who are Chartered Accountants, Engineers, Doctors, Architects, Dentists, Company Secretary, and management consultants have higher chances of getting home loans. The age requirement is slightly different between 24-65 years.
- Self-employed people: Any who files Income Tax Returns is eligible for the credit. The age requirement is similar to professional individuals.
- Credit score: The other crucial factor is the credit report. Lenders do not prominently mention the cut-off limit. The score range is generally between 700-900. If your score is closer to the said range, lenders sanction the loan amount instantly, and you also receive lower interest rates. To hold a high credit score, you should pay your bills and existing EMIs on time. Also, if the lenders find you spend on too many EMIs, your ability to pay the home loan gets affected.
- Income: Your current salary and housing loan amount have a direct relationship. If you draw high annual revenue, you can pay higher EMI. Some lenders also consider the number of dependents in your family. The more the dependents, the higher it hinders loan repayment and lowers the chances of getting the loan.
- Property status: Lenders give preference to applicants who purchase a lender-approved In such scenarios, they approve of the loan sooner, and the interest rates are low as well. The other factor is the current status of the asset, especially if it is the property for resale or under construction. Following is a probable list of documents that lenders ask for resale properties:
- Registration of property
- NOC from the bank only if there is an existing loan on the property
- Mutation certificate from the applicable municipality
- Power of Attorney, sales deed from leasehold to freehold
Indicative documents for properties under construction are:
- Property development plan
- Developer’s NOC
- Agreement document between the developer and you
- Plot deed
- Employer’s status: Your credibility also depends a lot on the organisation you work. If you work in a high reputation and high turnover company, you will easily get the home loan. Most lenders consider renowned companies before sanctioning the loan.
- Economic stability: depends on your past financial stability. It is always a good practice to maintain proper financial records. All lenders check the economic record of the applicant to gain better insight into your present and past financial trends.