Home Loan

Things to consider before you can apply for a Home Loan


A home loan is a sum of money issued by individuals from banks or other financial institutions to purchase a house. Home loans are provided at a flexible or fixed interest rate as per the conditions of the lending firm. You can choose the scheme of home loan apply online today. 

The property for which the home loan is issued is mortgaged with the lender for the time until the total loan is repaid along with the interest rate.

Apart from these, what matters the most is to qualify for such loans. The lending banks and firms assess the capabilities of the customers based on a few conditions before issuing home loans. 

They basically evaluate on the basis of the individual’s income, expenses, savings, work profile, economic condition, history of repayment, and other credits.

An important criterion that is viewed is the credit score. A credit score is a three-digit number rating the capacity of repayment of the individual.

A few things which the individual must consider before applying for a home loan are:

The credit score:

As mentioned above, the lenders rate credit score as their priority before issuing loans. It is the shortcut to get loans easily. This is why individuals need to maintain a good credit score.  

The CIR or the credit information report is a report which contains the credit score. This is based on the credit history of the borrower, that is, the amount borrowed by different institutions and firms are mentioned in this report along with the repayment capabilities of the borrower.

Fixing a budget:

The individual needs to evaluate and fix a budget for buying a home. This would make it easy to plan the loan amount, the interest as well as the repayment. 

If an individual has a good income and is in accordance with the loan amount, then it would be easy to apply for a loan as high as 80 per cent of the total value of the property. 

Downpayment and EMI:

The individual should also define the EMI or the equated monthly instalment that he or she should be comfortable with. This is important as this will help to evaluate the time period for which the loan would be issued. 

The feature of the EMI calculator has made the work simple and hassle-free by calculating this based on the details provided within a few minutes or seconds.

Documentation and paperwork for Home loan:

The individual should have clear information about the documents that would be required for applying for a home loan and ensure that they are present as he or she approaches the lending bank or firm.

A few important documents which are required for applying for a home loan are :

Income tax returns:

The documents stating the income tax returns or alternatively Form 16 with a mention of the past two or three years returns with all the taxes filed should be present. 

Identification Cards: 

ID cards which include pan cards, aadhar cards, or others are a mandatory part of the document work. This is important for the lenders to verify the address proof and identity proof.

Bank statements:

A proper income and expense reflected bank statement is required for the past six to twelve months. 

So, it is important for the individual to properly maintain all the documents and present them at the time of the loan issue.

Banks and lending firms:

It is advisable to not apply for a loan at many banks at the same time. This could negatively impact the credit score. 

So, it is very important to compare and contrast all the options before going for a definite one!

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