Check Your Eligibility for Housing Loan..!
By Mr. Naveen Kukreja, Paisabazaar.com
Acquiring a housing loan can be an arduous task as each
lender has its own criteria for evaluating a loan application.
Here are 5 factors
that almost all lenders consider.
1. Disposable income
Your disposable income is one of the most important
parameters for vetting your home loan application. It is derived by deducting
your statutory deductions, monthly expenses and existing EMIs from your gross
income.
A lender will expect your loan EMI to be within 40% of
your monthly disposable income. However, some lenders consider your gross
income for judging your housing loan.
If your disposable income is comparatively low and you
wish to opt for a higher loan amount, you may consider adding working members
of your family, like your spouse or children, as co-applicants.
2. Credit history..!
Lenders judge your creditworthiness through your credit
score. A low credit score may reduce the chance of getting a housing loan or
/ can lead to a higher interest rate.
Do not apply for loans with too many lenders within a
short period as it can pull down your credit score.
CIBIL classifies a credit score of over 770 as a good
credit score. However, other credit bureaus may have different scoring patterns
and yardsticks for a ‘good credit score’.
3. Compliance with legal norms..!
Lenders verify details of the property for which you are
taking the loan. They provide loans to house properties that have been cleared
by local authorities and have clear and valid title.
Some banks offer special loan packages on properties
listed in their database of approved projects. Properties in their database are
considered reliable as they do the due diligence of the projects themselves.
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| Naveen Kukreja, Paisabazaar.com |
4. Occupation stability & continuity..!
Lenders prefer to give home loans to people with a stable
job or income source. They also consider how long you have been working with
your present employer. Switching too many jobs during your career may create a
negative impression.
Government and PSU employees are the most preferred ones
followed by doctors, chartered accounts and employees of top private-sector
companies.
5. Age of the applicant..!
Your age plays a major role during the approval process
of the home loan. Although home loans carry maximum tenure of 30 years, banks
prefer borrowers to finish repayment by the time they are 60 to 70 years of age.
Thus, people in the 25 to 45 age group are preferred as
they have more than 20 years of their working life to pay off their home loans.
Generally, public sector banks are the most stringent
when it comes to loan approval process.
However, their rate of interest is also the lowest. The
reverse is true for housing finance companies and other NBFCs. Approach the
NBFCs if bigger banks refuse to finance your home purchase. You can transfer
your home loan later.
While most of the factors that banks consider have to do
with you, the legality of your house property is something that is beyond your
control.
Thus, always ensure that the property has all the
required clearances before making the final decision.
About the author..
The writer Mr. Naveen Kukreja is CEO & Co-founder, Paisabazaar.com
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