There are many factors work in deciding home loan eligibility of borrower and every bank has its own criteria to find out the eligibility and quantum of home loan.
For awareness of borrower some essential factors are given below :
Always put correct information in your application form because submitted information is always verified by different sources like Bank’s database, call by bank executive, call by third party, by calling up your employer and your references also. If any information seems wrong, bank has rights to reject application.
Financial Position and Repayment capacity
For approval of any loan application bank needs to check Financial position and Repayment capacity. Financial profile of borrower is an important consideration for the bank. The loan eligibility depends on the financial position of the borrower. Credit history, income level, net income, liabilities etc play an important role in finalizing of home loan application. Usually, the lenders maintain a database of the borrower and verify the credit history to check out previous repayment defaults, even from other lenders.
Applicant’s personal profile is also very important, these include factors like educational qualifications, profession, number of dependents, assets owned, liabilities owed, savings history etc. A higher number of dependants or existing liabilities implies lower repayment capacity.
Applicant’s Age plays a major role in determining the earnings potential of an individual. In case a property is co-owned, the co-owner cannot be a minor. Also, the co-owner cannot be above a certain age limit. The age limits are set to minimise ownership disputes. The age limit also affects the tenure of the home loan and EMIs.
The applicant’s retirement age is also considered. For example, if an applicant is 45 years of age and is set to retire at 60 years, the maximum loan tenure available will be 15 years.
In case the bank has a 75-year age limit for a co-applicant, and if the applicant is 40 years old and the co-applicant is 60 years old, the home loan will be sanctioned for a maximum period of 15 years only.
Property location always plays a big role in deciding home loan because banks having their area wise database and marked them Positive / Negative areas accordingly. If an individual intends to buy a property in ‘negative area’, he will not be granted a loan. Banks have specific norms with respect to a minimum area of the flat. This may be built-up area or carpet area. The age of the property is also an important consideration in case of purchase of existing properties. Home loans on resale properties are sanctioned only if they are less than 50 years old.
Banks conduct legal and technical appraisals of the property to see whether the title of the property is clear, there are no ownership disputes, the property is free from any encumbrances etc. In case there are any objections in these appraisals, the loan application is bound to be turned down.
India Home Loan Providers :