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Learn More About Home Loan
Buying a house is perhaps the most fundamental aspiration for most people. In today’s time, making this dream a reality has become really easy, thanks to the variety of Home Loan options available in the market.
So whether it is the first home that you are looking for or the second, whether it is for you and your family to live in or simply to make an investment for the future, Home Loans make it possible. So what exactly is a home loan?
A home loan is a type of loan where the consumer borrows money from a lender, to purchase a residential property and offers the same property to the lender as a security.
- Purchasing a property within a residential development which is currently under-construction
- Purchasing a ready property, from a builder or its current owner
- Purchasing a plot ’ in a private development, from a current owner or from a government development authority
- Financing the construction of your house on a plot you already own
- Purchasing a plot as well as financing the construction of your home on it.
Most banks lend as per the under-mentioned grid, provided the borrower can demonstrate the ability to repay the loan amount.
|Loan amount||% of Cost of Property|
|a) Up to Rs. 25 lakhs||90%|
|b) More than Rs. 25 lakhs & up to Rs. 75 lakhs||80%|
|c) Above Rs. 75 lakhs||75%|
You can apply for a Home Loan even before you begin the search for a property. The bank will look at your income details and give you a pre-sanction on the basis of your income eligibility. This will give you the confidence to decide on the budget that you have for your property buying decision. The final loan amount will of course be determined, once you provide the property cost and other details to the bank. They will fund a specific percentage of the property cost, subject to your income eligibility and the balance will be your margin requirement. Also refer the section on - ’How much of the property cost will the bank finance’.
Your Home Loan eligibility is determined after looking at the following:
The purpose of having a co-applicant to a loan is to be able to club your income with that of your co-applicant to get a higher eligibility on your home loan. All property owners need to necessarily be co-applicants on the loan. Other members of one's immediate family viz. spouses, parents, children& siblings may also become co-applicants to a home loan. Where income from a partnership or company is considered, the partners / directors can also become co-applicants, if the policy of the lender allows.
Availing a Home Loan is usually a big decision and specially one that will stay with your for a while. So take a moment to consider all possible options and scenarios before choosing your loan and your loan provider.
Use the following mantras and hopefully you will not make any regrettable decisions!