Home Loans, things to keep in mind

It’s a dream come true to have your own house. After the economic liberalization and the market being open to financial institutions to compete, it has only become easier to get a home loan. However, there are a few criteria that you must fulfil before you can apply for housing loan as there is a limit to the loan you can get for your home, irrespective of your income.

Home loan eligibility factors:

• Your source of income has to be regular
• Your age bracket should be between 18-69 years
• You should have a minimum of one year of work experience
• You must possess a valid proof of permanent address
• Other criteria that you should take in to consideration include the number of dependents, qualification, spouse’s income, income and employment stability, total assets and liabilities, etc.

Once you have met with all the eligibility criteria, the next step is furnishing the relevant supporting documents. These have to be valid, verified and updated as once presented, these documents are considered as final and binding. In a case where any of these documents are found to be untrue or forged, the immediate consequence is a rejection in the granting of your loan. Though the documentation requirement varies from one institution to another, the below listed ones are primarily the ones that need to be produced when applying for a home loan.

Document Checklist for a Home Loan:

• Proof of age – supporting your minimum and maximum claim of age
• Proof of identity and residence – valid documents could be passport, PAN card, ration card, voter ID card, etc
• Salary slips of last three months along with salary certificate from your current employer
• Proof of continuity in the job for last two years or Form 16
• Bank statement for last six months from your currently active bank
• Company profile for employees of a private limited company
• Proof of business address in respect of businessmen/industrialists
• Latest property tax paid receipt
• Sanctioned plan
• Receipts towards payments already made
• Sale agreement and title documents in favour of the seller (old flat or house)
• Sale agreement or construction agreement with builder (new flat)
• Total cost break-up on builder’s letterhead (new flat)

While completing the process of documentation, one should be very careful to make sure that you always ask for a letter on home loan provider’s letterhead mentioning the particulars like exact rate of interest, processing fees, payment charges along with interest-schedule. The benefit to be gained out of the given competition in the market is by making the most out of the different interest rates at which every institution offers a house loan to you. If you already have a home loan with one provider, you have an option to transfer your existing home loan to another provider, thereby saving a certain sum on this transfer. This process is termed as ‘home loan balance transfer’. However, you need to ensure that you have carefully read all the terms and conditions of home loan balance transfer, before initiating the process. 

Related Articles:

• 5 things NOT to do while picking a home loan
• Top 5 things to know before you go house hunting
• The Why and How of Home Loans

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