Buying or Constructing a house is one in every of the most expensive selections that a person makes in his lifetime. This action involves a large cash base. It is close to impossible to finance your house by the regular monthly income. Thus, the banks and non-banking money firms (NBFCs) provide home loans. And before giving out home loans, they have strict eligibility criteria in place. This is done to avoid any default risk or any NPAs (non-performing assets). They check everything, from your credit history to your monthly bank statements. Different lenders have different eligibility criteria check for home loans. But there’s not much of a difference. So, one ought to be ready with all the required documents before applying for a home credit. Many banks provide a home loan eligibility calculator for their customers to see whether they are eligible for the housing loan or not.
What is the Basic Eligibility Criteria to Avail a Home Loan?
Age Of The Applicant: In home loans, big amounts are provided. Young people are generally trusted more with the loan amount as compared to very old people. Simply because old people have high default risk. Also, an individual terribly young won’t have employment which will support him in paying the home loan EMIs. That’s why home loans are provided to person inside the age bracket of twenty-two years to seventy years (at the time of loan maturity). If an individual on the far side sixty five desires a home equity credit, a co-applicant ought to be be added to the loan application form.
Net Monthly Income: On condition that the person has adequate repayment capability, then solely the house application is approved. Banks and non-banking firms extend loans to people having a minimum salary of at least INR 25,000 per month. Whereas, monthly income of self-employed people ought to be INR 35,000 to be eligible for a home loan. However, this minimum pay criteria differ from banks to banks and cities to cities. Tier -1 cities can have a high monthly income criteria as compared to Tier-2 and Tier-3 cities.
Employment Details: Those who work for ruptured firms like some MNCs, the approval process is speedy for them. If the banks acknowledges your company and is registered with them, the approval happens in a snap. Additionally, the bank demands for a minimum work experience of three years and with the present company for a minimum of two years. While, within the case of self-employed people, the minimum business experience needed is for five years.
CIBIL Score: CIBIL score is checked by all the banks and NBFCs to measure you repayment ability and credit history. A CIBIL score of 700 and higher in the case of home loans is taken into account to be a decent score. If you have maintained a score of 700 and higher, worry not, you’re through together with your application process. Sometimes, lenders discount on the check of the CIBIL score as they need your security pledged against the loan, that they can seize in the case of default.
What are the Documents Required to Support the Home Loan Eligibility Process?
- Identity Proof: Any of those documents would do - Aadhar Card/ Driving Licence/ Passport/ Govt worker ID/Voter ID
- Address Proof: Aadhar Card/ Driving Licence/ Passport/ Electricity Bill/ Gas Bill/ Phone Bill
- Proof of Income:
Salaried Employees - Three months pay slip, Form 16, Three months bank statement, ITR Filings.
Self-Employed: 2 yrs ITR, Balance sheet with CA seal and sign,
Computation of Income, P&L, 6 months bank statements of personal and business accounts, ITR Filings, Business continuity proof (3 yrs for HL / 5 yrs for LAP)
- Loan Application Form Duly Signed
- Lastly, the processing fee cheque.