I had spent the last seven years working my bones to buy my dream home. What I was curious about was the home loan eligibility criteria. But wherever I looked, it required me to put up to 30% of the house’s value and had a high-interest rate.
After a lot of research and asking around, I was recommended Bajaj Finserv by a friend. When I approached them, I was pleased to find out I had to just put up 20% of the house’s value as a downpayment. I secured an 8% interest rate loan, allowing me to buy the house on the loan while saving some of the initial money I was ready to put down and invest it so that I could own my home quicker.
A home loan is a secured loan where you use your property as collateral to purchase it. It can be used to buy a home, construct it, renovate it, purchase a plot, extend the house, or even home loan transfer the balance to another lender for more favorable terms.
There are three interest rates for people looking to get a home loan: fixed interest rate, floating interest rate, and hybrid interest rate.
Loan providers have age as a criterion, where salaried individuals must be between 23 and 62, whereas self-employed individuals must be between 25 and 70. The upper age limit is the age at the time of the loan maturity.
A CIBIL Score of 750 or higher is ideal for getting a home loan.
The RBI and the NHB have set up regulations stating that banks and financial institutions can only offer up to 90% loan-to-value ratio depending on the property’s value. This means that the borrower needs to provide the remaining amount as a downpayment when seeking a home loan.
How eligibility for housing loan is calculated?
You can use a home loan calculator to see how much income is required to finance your home loan. Typically you would not be offered an EMI over 50-60% of your monthly income. But manually calculating that is a pain, especially when loan providers have made it accessible using home loan calculators.
Calculating housing loan eligibility using Bajaj Finserv’s home loan eligibility calculator is effortless.
- Download the app from the play store or app store
- Create a new account or log into your account
- On the home page, tap on three bars situated on the top right.
- Here, you’ll see ‘Calculators & Buying Guides.’
- Go to ‘Deposits Calculators’
- Choose ‘home loan eligibility calculator.’
- Fill in the required details
- Experiment as per your requirement.
Here are a few ways in which interest rates affect your eligibility for a housing loan.
- As mentioned above, you will not be granted a loan if your EMI is more than 50-60% of your gross monthly income without bonuses and with tax deductions.
- This means that if the interest rate is high, you may not be eligible for a home loan.
- High-interest rates also adversely affect your ability to pay back the loan, and the higher the duration, the more interest you would need to pay on the house.
Thus, It is now straightforward and convenient to calculate home loan eligibility using home loan calculators without going to individual lenders to determine their requirements.
Now that we know the requirements, we can make informed decisions and plan our future investments accordingly.