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Who can apply for a home loan?

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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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8 COMMENTS

  1. Everyone dreams to own a house where one can live happily ever after. But not everyone has funds enough to do so. No worries! The moment you decide to buy your dream house, you can apply for a home loan. One can apply for a home loan even before selecting the property. The loan is sanctioned only after one fulfills the above mentioned conditions. Apply for a home loan and build your dream house!

  2. Lack of funds, probably the most common hurdle between a common man and his dream house,but the most intelligent creature on this earth-MAN,again finds a solution to his problems. Today, it just takes a few moments to lay down the base of your dream house. Getting home loans is a very easy task these days and reliable too. The article throws light on all the requisites for applying for a home loan and also the basic monetary limits that are set for the same. A really useful article for everyone planning for a home loan for a dream house which will no longer be a dream!!

  3. Every man wishes to build or buy his dream home. Most of them prefer to go for a home loan due to income constraints or with a motive to save certain amount of tax. Quite a lot of us apply for a home loan and get depressed when the loan is rejected. This article is a guide to those who wish to seek a hassle free loan .

  4. Anyone can apply for a home loan, be it a salaried person or a wealthy businessman. As the article rightly states that the most important factors to be analyzed before applying for a loan are age, regular income, creditability, etc. The less is your age, the higher is the tenure and vice versa. Calculating EMIs and balancing your savings is another important factor.

  5. After reading about how low-income earners can get home loans on this site, I think all that is really needed is a stable job. If you are not close to retirement and have good employment, then you can get a loan. It doesn’t matter what kind of job you have – just a stable one.
    What do you think? I’d love to hear anyone else’s thoughts on this…
    Maybe I am wrong, but contract work doesn’t seem to be the right employment for a bank to look at you kindly – unless you have very, very high savings!

  6. Almost every individual or couple takes a home loan these days. Especially, in big cities, it is almost impossible to buy a house without a loan. There are many home loans available through most banks. From the article you realize that home loan is offered to you on basis of your age, income and liabilities. Similarly, you should choose the home loan depending on factors like interest rates and EMI. Happy home hunting.

  7. I never thought of repayment structure and loan tenure this way. It does make sense after it was explained, but it never occurred to me that buying a house when you are older is a shorter process than when you are younger because of lifespan. This article had some very interesting detail.

  8. A very well explained article with all the important points on which the bank grants loan is incorporated. Age, job stability, Cibil rating all are considered to be a major factor for the bank to decide on the loan of the individual. Home loans are very common and to work on it before applying it will surely result in securing the loan.

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