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When you are applying for a home loan, you have to fulfill the basic eligibility for approving the loan such as a citizen of India, at last, 21 years old, etc. Apart from the eligibility criteria, you have to determine the several factors which determine your home loan eligibility such as:
A home loan is an amount which can be borrowed by the individuals for performing their home purchase, home renovations, home constructions, and many more. For approving the home loan, the lenders can take the property as security for lending the money.
Home loans are very popular in India because it carried with a minimal rate of interest, no hidden fees, and charges as, smooth and worry-free borrowing well as value-added features. For getting a home loan, you have to consider the steps:
Home loan has two types of interest rates such as fixed-rate and floating rate. Both of them have their own set of benefits and used for different purposes.
Fixed home loan interest never charges with the market force and completely dependent on the market rate. In a fixed rate, you can easily forecast your loan EMIs and plan for the loan repayment with great ease. The fixed interest rate is generally taken when the interest rate on taking a loan is low and offer stability loan facilities.
Floating interest rates are commonly are varied over the course of the loan's tenor action. If you will consider the floating rate of interest in your home loan, then you never predict the EMIs with utmost certainty. In these interest rates, when the rates drop, the loan instantly benefitted. So, if you are working in real-estate, then floating interest rates are ideal ones.
Yes, the home loan tax can be deductible in case of repayment of interest under the section of 24 of ITA of India. On the other hand, if the home loan has pertained to the rented property, then there is no limit to the deduction of the interest on the home loan.
Owning a debt-free house is always satisfying, so the home loan borrower always likes to prepay the outstanding home loan amount. If you are paying a high amount of home loan interest, then it's always advisable to prepay the outstanding home loan amount for reducing its interest. Once you will prepay the home loan outstanding, then you can invest that money in long-term assets like fixed deposits or equities.
Higher-income will sanction a high amount of home loans as well as lower EMIs on actual loan value. Moreover, the minimum salaries for applying the home loan for the salaried employees in metro cities are 25,000 rupees per month and 20,000 rupees per month for the employees of other cities.
The maximum home loan eligibility is generally calculated after the loan amount getting deductions into several EMIs that would be paid by you in every month. In general, the banks are providing a maximum of up to 85% of the loan amount against the current value of your property. In this way, if you want a home loan for buying a property of 70 lakhs then the maximum loan amount you can get is 85% of that property cost that is 59.50 lakhs.
Now the Indian government can encourage individuals to invest in a house. Due to this reason, home loans are eligible for tax deductions. So, when you buy a house on a home loan, it can facilitate you with multiple tax benefits as well as reduce your tax outgo. Yes, you can get the tax deduction facilities on your home loan with following benefits such as:
For the faster processing and hassle-free execution of your home loan, you have to gather all the required documents very carefully before applying for the loan. Here are the documents you need for processing the home loan:
The co-applicant is the person in the home loan who is equally responsible for repayingthe loan like the original borrower of the loan. According to the law of the bank, the co-applicant needs to be a blood relative or immediate family member. Due to the co-applicant, you will enjoy several other benefits in your home loan approval process such as:
For first-time buyers, choosing the home loan always seems to be a complicated process. While choosing a home loan the first thing you have to consider is the interest rates which are divided into two parts such as fixed interest rates and floating interest rates. Below points define both of them elaborately:
In fixed interest rates, the interest amount is fixed and never varies with the market fluctuations. The interest rates are paid on the monthly basis of the starting month. It is useful for the below points:
But have a higher rate of interest and limited repayment tenure as well as a prepayment penalty.
Moreover, the floating interest rates are adjustable rate home loans in which the interest rates are changing throughout the action. These types of interest rates are reset at a specific interval and could vary in every quarter or 6 months. It is also useful for the below points:
The pre-EMI is defined as an interest amount that can be paid over the entire tenure of a home loan. Generally, the pre-EMI payment is started when the home is under construction. Once the Pre-EMI payments are over, the EMI payments started immediately. It also provides several benefits for your home loan such as:
Now people are taking home loans to get their dream home faster. So, the financial institutions and different banks can provide home loans to bring their dream home into a reality without any financial burden. But the lenders of the home loan need to ensure that you are eligible for the home loan. Below points define the factors that affect your home loan eligibility:
In India, several national or private banks, and non-banking financial companies can provide numerous home loan options to all individuals. Based on your needs you have to choose the home loan by understanding all the documentation, eligibility criteria, and many more requirements needed by the lenders. Here are the different types of home loans you have to consider must:
The MCLR is generally defined as the Marginal cost of fund-based lending rate which indicates the financial body which is never permitted to lend money. In the home loan, the MCLR rate is succeeded the base rate and the rate can be fluctuated due to the force of the banks and financial institutions. Moreover, the MCLR rate is determined by the deposit rates and based on the loan tenors. It can be calculated with the below parameters:
Yes, you can switch from a fixed rate to a floating rate during your home loan tenure and vice versa by paying a small fee. The reason behind is, the home loan lenders can understand the consequences of the loan borrowers and provide them the right to choose the best interest rates as per their requirements. Moreover, the floating-rate loan does not have any prepayment penalties.
The home loans provided by the different banks and financial institutions are coming with an option of moratorium period in which you don't need to pay your loan which is between the 36 months and 60 months of the loan approval. After the end of the period, you need to start the repayment of your loan in EMI till your long tenure end. During the moratorium period you don’t need to pay the EMI but only need to pay the Pre-EMI interest.