Customer GuideLines for bank loans

Everyone likes hearing people say “Wow, what a beautiful house you have!” From cave dwelling, we have evolved and now a house provides far more than just shelter...it has also become a source of pride. Buying a home requires large capital and good planning as when you decide to purchase a house you do not feel like compromising on anything but your resources are limited. Now with the various home loan schemes available in the market, you need not get disheartened as home loans can make the dream of an own house turn into reality.

Following are some of the factors used in evaluation of home loan eligibility:

• Nature of Job of Individual: Most housing finance companies have a list of 'negative' professions. This can cause a lot of hassles for the individual coming from such professions before being able to get the loan amount.
• Location of the Property: Likewise, they may consult another list known as 'negative area list'. Any individual applying for the loan to get a home in such areas may not be granted the loan by housing finance companies. The same is the case with properties falling outside the geographical limits of the city, as defined by the housing finance institutions.
• Personal Details of individual: Housing finance companies also consider details like the number of people financially dependent on the individual, the individual’s credit repayment history if any and his savings habits.

Tips to finance your home loan

• Club your all incomes to get the best deal You can club your spouse’s income, additional incomes like perks, rent and any other income that you immediate family earns. This may help you move to a higher eligibility bracket
• Have a good credit rating Lenders will be happier if you can show them a good credit history. Show them that you are not overburdened by credit card bills, mortgages and other loans.

Documents Required

Documents are required by all HFIs but vary based on your occupation, employer, qualifications, experience, etc.

• Income documents: Salary certificate, Income tax returns, bank statement etc.
• Personal documents: Proof of identity like PAN Card/ Voters ID/ Passport/ Driving License.
• Residence Proof: Proof of residence like recent Telephone Bill/ Electricity Bill/ Property tax receipt/ Passport/ Voters ID /Bank Account statement/passbook for the previous six months.
• Business Proof: Proof of business address in respect of businessmen/ industrialists
• Age proof: This is required because all banks have different eligibility criterion as per age.
• Experience proof: this is another eligibility criterion of banks, according to which the person should have a given amount of experience in the current company.
• Legal Documents: there are legal documents that need to be submitted by you to the HFC for mortgaging and these differ from state to state and also depend on your property type. The following form a broad outline of the documents required and a detailed list can be found here.
  • Copy of the offer letter sent by the HFC, accepted by you.
  • Title documents of the property which include
    • Duly registered sale agreement.
    • Receipts of your own contribution.
    • Allotment letter
    • Registration receipt
    • If needed, land documents indicating ownership.
    • Possession letter.
    • Lease agreement, if the property is bought from a development authority
    • Mortgage deed if the HFI opts for a registered mortgage.
  • No Objection Certificate from the developer, society or development authority
  • Personal Guarantees, if required.
  • Documents for alternate or additional security.
  • Post dated cheques for the EMIs.

Every borrower who wants home loan must take care of certain factors.

• Firstly, he should evaluate his requirement and choose the appropriate type of loan like home construction loan, home improvement loan etc.
• Secondly, the borrower should calculate his income and repayment capacity before deciding the loan amount.
• The borrower should be clear about the calculation of interest rate, monthly payment amount and the different kinds of fees (if any) that he has to pay.

As most housing finance companies have reduced their interest rates, this is a good time to buy your dream home using a home loan. And with improved technology, the best way to look for home loans is online. You can surf Deal4loans and compare the rates, policies and terms of different lenders and then choose the best kind of home loan for yourself. This whole process of searching for home loan online is completely hassle free and will save your time energy and money.

Check the factors which decide your home loan eligibility

Basic Parameters that describe your Home loan entitlement & home loan endorsement

• Your Salary/ITR.
• Property Check.
• Your Profile, Academic & Professional Background.
• Total work experience.
• Your credit/default profile.
• Family Credit History.

Salary/ITR-

Higher the salary of an individual more is the chances for greater eligibility of a loan amount.

Property/Check-

Banks check whether the property selected by you is ideal according to the technical & legal norms. Most importantly, they check the authorities have sanctioned property or not. Therefore, before deciding the property do check the property has approved sanctioned plans & complies with legal & technical aspects of the property.

Your Profile, Academic & Professional Background-

Banks credit manager decisions are leveraged on your profile, academic & professional qualification. As it is a long-term commitment with the bank, they analyze on potential growth in your career graph, industry you are working in & kind of profile you are into. Like, Call centers/BPOs are not treated at par with other profiles, as they tend to have high attrition rates. Banks generally want an applicant with stable job hence check for current & total work experience. Doctor’s, engineer’s, CA, Mgmt etc., sway banker’s decisions as they see the potential growth in their careers.

Your Credit/default profile-

Banks verify whether you have defaulted any or previous loan repayments. This is done against both internal systems and plus third party systems like Cibil/Satyam. So now, it is tough to have bad debts with one bank & take loan from other bank.

Family Credit History-

Banks also verify the financial records of your blood relation with the help of Cibil/Satyam. If they have defaulted then you are in a fix. You need to get to unnecessary hassles so, it’s always advised to have clean record with the banks. Generally, banks check these things before giving loans. Basically, they check your ability to pay, assess your intention to pay & the property they are funding is safe or not? Therefore, when you are shopping for home loan remember what are your advantages & disadvantages and negotiate accordingly with your bank.