Home loans are primarily used to buy new properties, pre-owned houses, and even properties that are still under construction. Lenders usually shoulder about 80% to 90% of the total property value as part of the loan. The remaining 10% to 20% is paid by the borrower as an initial down payment to the seller or builder. The balance can be paid by using savings, securities, life insurance, fixed deposits, or by taking out a personal loan.
These days, house developers and builders offer fully furnished homes to buyers. These reduce the buyer’s cost of furnishing the house and at the same time generate higher loan amounts. Home loans are available between Rs 2 lac to Rs 5 crore.
We, at Paisaportal.com, know that every family deserves a good home. And if money is what holds you back, we can open the door to better options in terms of finding lenders that will offer the interest rate and payment terms that meets your requirements perfectly.
Advantages of Applying for a Home Loan
Home loan applications have several advantages:
- Attractive interest rates
- Access to Floating or Fixed Home Loans
- Door-step service from enquiry until the loan is disbursed
- Balance transfers from various banks
- Impressive loan coverage of 80% to 90% of the total price of the property depending on borrower’s repayment alignment
Types of Home Loan
Depending your situation or need, there are various home loans that are catered to meet your circumstances and financial condition:
- Bridge Loan: These loans bridge the financial gap especially at a time when the borrower has found a new home but needs to sell an existing one. The money is used to pay for the new one and is repaid once the old house is sold.
- Home Construction Loan: This is applicable for those who want to construct a new home from scratch or a partially completed structure.
- Home Conversion Loan: In some instances, you may decide to move to another house even when you have only stayed a couple of months in the existing once. Under this condition, this type loan is more appropriate.
Technically, the new loan covers the old one as well as the money needed for the new house.
- Home Extension Loan: This home loan is used to finance an additional space or room in the existing property.
- Home Improvement Loan: This is used to pay for the repairs and renovations needed to improve the property.
- Home Purchase Loan: This loan is used to purchase a new house
- Land Purchase Loan: This home loan is utilized for purchasing a land, which can be later used for construction or investment
Documents Required in Applying for a Home Loan For applicants and co-applicants:
- Proof of Age
- Proof of Address
- Proof of Income
- Latest bank statement for six months
- Latest IDs with photo such as Passport
For employees:
- Employment certificate
- Copies of TDS certificate and pay slips for the last 3 months
- Latest Form 16 bank statements issued by employer
For self-employed:
- Copy of audited financial statements for the last 2 years
- Profit and loss account for the last 2 years
- Copy of partnership deed for partnership firms
- Copy of memorandum of association and articles of association for companies
- Income tax assessment order
Processes in Applying for a Home Loan
- Find the property you wish to avail
- Go to pasiaportal.com and provide some information on the online form and submit it
- Wait for our call and select the best deal from the range of matching lenders based on the details provided by you on the online form
- Choose the lender you wish to apply for a home loan, according to the terms of payment, interest rates, benefits, premiums, and more
- Fill in an application that requires personal information, financial details, and property information and send it directly to the lender
- Submit the necessary documents
- Bank verifies loan eligibility and total amount based on income, age, nature of business, experience, etc. Credit history and score will also be analyzed
- Bank releases the loan, provides details, and presents an offer letter to the applicant
- Applicant should send an acceptance letter to the bank, stating that the terms and conditions on the use of the home loan is understood
- The issuing bank checks all the necessary documents to validate the amount going to be released
- The check is signed and the amount is disbursed
Loan application normally undertakes several processes to ensure the credibility of the documents and the borrower. Another drawback is finding a lender that can offer the terms and rates that you want. At paisaportal.com, we move you a step closer because we do the searching for you. By filling in our online form, you will be dealing with a lender of your choice in no time.
Charges and Fees in Applying for a Home Loan
- Processing Fee: These are charges for submitting the loan application, encoding, assessment, and evaluation for confirmation. The fee ranges between 0.5% to 1.0% of the total loan amount
- Administrative Fee: A charge that is usually demanded at the time the loan check is released. However, some banks no longer apply this fee
- Prepayment Penalties: A fee being paid when you pay before the due date. It varies between 1% and 2%, depending on the prepaid amount
- Legal Charges: Fees that are charged from you for legal and technical verification
- Delayed Payment Charges: These are demanded when the on the agreed date of settlement of the payment of the equal monthly interest has lapsed
- Bounced Check Charges: Penalties of Rs 250 to Rs 500 are laid, depending on the number of bounced checks processed
Computing Eligibility
When the repayment capacity is being determined, there are certain factors that are being considered. These are:
- Your annual or monthly income
- Age
- Number of dependents
- Assets and liabilities
- Stability or continuity of your business or employer’s company
- Maximum value provided by the bank.
Tips on Increasing Eligibility
If your spouse or other family members are employed or have businesses, include them as co-applicants as this would increase the loan amount. Adding bonds, fixed deposits, and insurance policies can also increase eligibility.
People that can apply for a Home Loan
- Employed individuals
- Self-employed professionals
- Non-resident Indians
Requirements in applying for a Home Loan
- Minimum age is 21 years old as the loan is approved
- For employees: with 5-25 years of loan tenureship, maximum of 58 to 60 years old or until retirement are accepted
- For self-employed: maximum of 65 years is accepted
- For co-applicants: Same age requirement for either employed or self-employed
Paisaportal.com is your virtual assistant in finding solutions to your home loan needs. We offer our services free while you get the advantage of living in your dream house. Fill in the online form and in no time, we shall get you in touch with best lender deals possible according to the details submitted by you.