Home buying is a major once-in-a-lifetime investment that most people make at some point. However, with property rates touching high levels, buying a home is out of reach in absence of external support.  Taking a home loan to buy a home has virtually become a norm, if not compulsion. The reason can be attributed to the trends in real estate, which reflects major fluctuations in home loan interest rates, EMIs and property prices in most places in our country.Getting a home loan is usually the only option for home buyers to be able to buy their own residential property. In this situation, knowledge of eligibility criteria for home loan is a must so that one doesn’t go wrong with home buying.

The eligibility criteria for buying a home is basically a set of parameters laid down by financial institutes like banks to determine the eligibility of an applicant to be given a home loan. Before giving a home loan to an applicant, banks evaluate the viability of approving sanctioning loans to the person. It is done broadly on the basis of factors such as:

• Monthly income
• Nature of job
• Present age
• Remaining working years
• Nationality audit reports
• Lease rental discounting
• Residence type
• Existing loans, if any
• Fixed financial commitments
• Existing financial transactions
• Filing of income tax
• Identity proof 
• Documents
• Address proof
• Credit score
• Credit history

 

The list furnished above incorporates a majority of aspects that banks consider before sanctioning home loans to an individual. Banks have their own guidelines and rulebooks on the basis of which they sanction home loans.

Also Read: Document Checklist Guide for Home Loans

It is advisable for applicants to keep all documents and details handy before applying for a loan. They should also compare and contrast eligibility criteria of home loans offered by different banks.  Also, seeking advice from knowledgeable individuals, including consultants in a bank’s home loan department itself is desirable.

Home Buying Caveats to Watch out for

Most banks induce potential home buyers to apply for home loans through attractive advertisements and communications.  However, not everything turns out the way it is projected and what you expect. For instance, banks guarantee a certain amount of home loan on the basis of your net income (NOT gross income, which is higher). When the details and actual loan amount are actually finalised, they may be lesser than what you calculated as it will be on the basis on your net salary (with some things deducted from that further). You will also have to consider how much you’ll be spending on other regulations and formalities like stamp duty and registration charges while buying a home. If you already have some other loan (e.g. car loan, personal loan, etc.), that will also be considered by the bank, which will result in a cut in the final amount sanctioned. Home loan interest rates offered by the bank you are interested in or opting for is also to be measured with due diligence. Opting for a compare and contrast step and home loan eligibility norms by different banks should also be considered for zeroing in on a bank.

 

Current Factors Impacting Real Estate

Home buying is a huge investment that involves a substantial amount of money, often a major part of one’s life savings. Therefore, one has to act with utmost caution and wisdom before taking a decision while buying a home. Other major influential factors are the current economic, social and even political situations which impact the real estate field. Right now, the COVID-19 pandemic has impacted everything, including realty. The effects are evident in the alarming upheavals it has created not just for home buyers but also for developers and sellers.  Changes in real estate state and factors like home loan interest rates, eligibility criteria and employment status of applicants are undergoing extensive changes. The pandemic is far from over, and unpredictability is prevalent at every step. The best thing to do now is ponder over things deeply and then take a decision, and hope for the best.