Aspiring homeowners who have put off buying a home due to high interest rates and low affordability of home loans can finally set their sights on buying their dream home. Current market rates are such that anyone looking for a home loan can benefit from low interest rates and competitive loan terms. Market leading lenders are offering interest rates on home loans starting from 6.65%* per annum to eligible salaried and professional applicants, with their EMIs starting at a minimum amount of Rs. 642/Lakh* only.
However, to qualify for a low-interest home loan, you must be able to meet your preferred lender’s eligibility criteria, documentation requirements, and pay the fees associated with borrowing from a home loan. While lenders today try to keep these aspects of borrowing a home loan easy and hassle-free, they are still crucial steps in your borrowing journey, and you must meet these requirements to get the most out of what your lender has. to offer.
This article highlights important milestones in your home loan application process to help you maximize your chances of getting approved with favorable loan terms. To learn more, read on.
Understand home loan eligibility criteria and how to best meet them
Expecting borrowers to meet home loan eligibility criteria is a uniform mandate for all lenders, as it helps them assess the quality of your home loan application and determine if you are a low-cost borrower. risk. Adhering to your lender’s eligibility parameters enables you to derive substantial benefit from their bouquet of products and add-ons, such as a large loan amount, flexible repayment term, and most importantly, an interest rate. competitive home loan interest that lowers your total cost of borrowing. Below are the usual eligibility checks that lenders have in place.
Applicant’s CIBIL score
Also known as your credit score, your CIBIL score is essential in deciding the interest rate and loan terms you can get for your home loan. Your CIBIL score shows your repayment history, credit usage habits, outstanding debts, and overall financial health, giving the lender a realistic idea of your repayment capacity. By taking note of this, your lender offers you the best possible offer suited to your credit report and financial profile.
Most lenders offer home loans to applicants with a CIBIL score of 725 or higher. However, we recommend having a score of 750 and above to qualify for low home loan interest rates and high value loan amounts. If your CIBIL rating falls below these benchmarks, take the time to improve it before opting for a home loan. Clearing up all unpaid debts and pending bill payments goes a long way in cleaning up your CIBIL score, as well as performing routine checks on your credit report to rectify any discrepancies your report may have.
Candidate work experience
Your work experience and job profile are also aspects that lenders will consider before sanctioning your home loan amount. Anyone can benefit from a low-rate home loan if they have the required professional experience. Salaried persons must be employed in a public or private company or multinational organization for at least three years to apply. Professional applicants, such as doctors and chartered accountants, must also have a minimum of three years’ work experience and a valid practicing certificate. Their self-employed counterparts who wish to apply for a home loan must be able to demonstrate a stable source of income and business continuity for at least five years.
Applicant’s age
Your age is another factor that helps the lender decide what loan terms to offer you. Older applicants are more disadvantaged in this regard, as the lender may consider 62 as the maximum age, that too – at the time of the loan maturity itself. This could lead to higher interest rates, lower penalty amounts, or a shorter repayment term. However, seniors can still increase their chances of getting a lower home loan interest rate if they include a co-applicant with a good credit score and a strong financial profile.
Documents needed to complete your mortgage application
Once you have met the lender’s eligibility criteria, you are on your way to having your mortgage loan application approved – all remains submit the correct documents which will help the lender to verify your financial information and income.
To make it easier for you to compile these documents, we have divided them into categories.
Know Your Customer Documents
Identity proof: Applicants can submit their Aadhar or PAN card, along with their passport size photographs
Residential proof: Applicants can submit utility bills like electricity or gas bills, or their bankbook
Income proof documents**
Salary statements: The employee candidate must present a 3-month pay slip as proof
Commercial documents: Self-employed workers must be able to demonstrate at least 5 years of business continuity
Tax documentation: Applicants must submit their latest ITR and in some cases also submit their Form 16
**Applicants should note that documentation requirements are subject to change at the discretion of the lender.
Other documents
Property documents: Lenders will also want to see documentation supporting the purchase of the property for which the loan is being taken. This may include a registered bill of sale, a copy of the stamped sales contract, or even a copy of the approved project plan.
NOC: For applicants changing lenders by opting to transfer their home loan balance, they will also be required to submit a NOC, foreclosure letter, and account statement to their new lender.
Borrowers can simplify their home loan application process while improving their chances of being approved by using online tools, such as the home loan EMI calculator, to provide a tentative EMI schedule – depending on your repayment capacity. He can guide you to apply for a loan amount that meets your needs and respects your budget, without overstraining you. Calculate your EMI home loan and keep a repayment schedule handy to add to your home loan eligibility.
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