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What Is My Home Loan Eligibility? Research Team | Posted On Friday, June 01,2018, 04:50 PM

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What Is My Home Loan Eligibility?



The bank wants to make sure that you are able to repay the loans on time. It seeks an assurance that you are capable of repaying the loan. The tenure and interest rate will also determine the loan amount.

Banks sanction home loans to help you buy house/property. You need to have a good credit score to get the home loan sanctioned.

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What Is My Home Loan Eligibility?

Banks or NBFCs normally give 80-90% of the property value as a loan and you have to arrange the remaining amount. The total loan amount includes registration, transfer and stamp duty charges.

1. Do you require a co-applicant?

If you apply for a joint home loan with spouse or brother, he/she is the co-applicant. Having a co-applicant makes you eligible for a higher quantum of loan.

2. Documents for home loan?

Along with the home loan application, you have to furnish documents like Income Proof, Identity Proof, Age Proof (Birth certificate), Address Proof, Employment details, Educational proof (school/diploma/degree certificates), Bank statements, Property details for which the loan is availed and so on.

3. What is sanctioning and disbursing of home loan?

Sanctioning is one of the most important stages of a home loan. This is a trial by fire. Your home loan could be approved or rejected. It all comes down to the bank. If the bank is not satisfied with any of the documents provided by you (applicant), then the probability of approval is quite low.

After the bank completes technical, legal and valuation exercises, the home loan is sanctioned. Interest on the home loan depends on the rate on the date of disbursement and not on the date of sanctioning.

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4. How are home loans disbursed?

The loan can be disbursed by the bank either in installments or all at once. If it is an under-construction property, the disbursement is in installments based on the progress of construction, as assessed by the bank and not necessarily according to the developer's progress in construction. In case of a constructed property, the disbursement is made in full.

5. What are fixed and floating rate home loans?

In a fixed rate home loan, interest rate is fixed. In Floating rate home loans, interest fluctuates depending on market conditions.

6. What are the costs in a home loan?

Availing a home loan is not just the home loan EMIs.  There are other charges like processing fees, technical evaluation fees and so on. Processing fees are around 1-2% of the home loan amount.

7. How can you repay a home loan?

They are many modes of repaying a home loan. There’s standing instructions to the banker to pay the installments through ECS (Electronic Clearing System), opt for direct deduction of monthly income provided by your employer or issue post-dated cheques from your salary account.

8. What is prepayment of a home loan?

Prepayment is when you decide to pay an additional amount (over and above the regular EMIs). This is a great way to being down the EMIs.

Banks must provide the borrower with a statement showing the total interest and principal to be paid during the year. This statement helps you claim the tax benefit. Banks are supposed to send a statement showing the actual amount of interest and principal repaid, that would help you claim tax benefits.

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