Facts to know before applying for Home loan
Banks have specified certain parameters for home loan application by individuals. These parameters are age, income patterns, level of liabilities, and so on. Before applying for a home loan, an individual must understand the eligibility requirements for home loan application. He must analyze his situation in light of the parameters.
The eligibility criteria can be discussed as follows:
Depending upon your age
The age of the applicant influences the application process. Most of the banks have mentioned that the last EMI of an individual must be paid before completing age of 58 years. The repayment structure depends largely on the age of the individual. Let us study some examples. If you are of 23 years, then you have more years for repayment. The bank may grant you tenure of about 20 years for repaying the entire loan amount. On the contrary, if your age is around 50 years, then banks will grant you less period of time. Your repayment tenure can be around six to eight years.
Depending upon your income
Individuals with high level of job stability can definitely apply for home loan. Such individuals face less difficulty in the home loan processing as banks feel that they can pay the installments on time. But if an individual shows his perquisites, allowances, incentives, bonuses as his part of income, then please not that bank do not accept this. If your spouse is also working, then you may show his or her income payments. Accordingly, you may even make a joint application for home loan. Your salary must not consist of more incentives and perks. Otherwise, the processing may be not done smoothly.
Depending upon the liabilities
If you have a bad credit score, then it is advisable not to apply for home loan. You should work for repaying your debts and liabilities first and then, apply for the home loan. The share of your liabilities in your income should not be more than of fifty to sixty percent. It reflects in your records. The banks can withhold the processing of your home loan application immediately. Hence, you are suggested to clear off your liabilities.
Depending upon your cash flow and expenditure pattern
Home loans are of substantial amount and also include considerable interest. Obviously, buying home from your life-long savings is not an easy task. Hence, banks consider your cash flow as an important element in granting home loans. According to the practices of maximum banks, nearly forty percent of a person’s salary is debited from his account for paying home loan EMIs. The home loan is given on the basis of salary structure, tenure and interest rates prevailing in the market. Thus, banks are involved in understanding your cash flows, your spouse’s income, the number of dependents in your family, etc.
Thus, an applicant must understand the home loan eligibility conditions, application process and repayment schemes. You must also check attractive schemes offered by banks in this regard. You must analyze your potentials and capacity to repay the loan installments in future.
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