Are you planning on borrowing a home loan?If so, then know everything about –what is a home loan, how to apply, essential documents, eligibility criteria, and more.
What Is a House Loan?
A house loan or a home loan is a sum of money borrowed individually or jointly to finance –
- a residential property
- a plot of land for house construction
- renovation, repair, or extension of an existing house
The payment terms of a home loan are determinedusingvarious housing loan eligibilitycriteria like employment stability, age, monthly income, etc.Moreover, theseeligibility criteria are used to calculate the home loan amount and tenure.
How to Apply for Home Loan?
Before starting the home loan process, always check your housing loan eligibilityto estimate your ‘own contribution’ towards the total property cost. Typically, lenders require the borrowers to cover 10-20% of the property cost as a down payment.
The rest,i.e. 80-90%, of the total property value, is financed by the lender. Other expenses, including stamp duty, registration charges, and processing fee, are not covered by the financed home loan amount and must be paid separately.
Furthermore, to determinehome loan interest rates, loan tenure, and other repayment terms – lenders evaluate your monthly surplus income and expenses. Usually, a higher monthly net incomeis eligible for a higher home loan amount.
Why Use a Home Loan EMI Calculator?
Equated monthly instalment or EMI is an amount to be paid every month until the loan tenure is over. Make use of a home loan EMI calculatoronline to estimate theEMI payments for a specific loan amount and save efforts on manual calculations. Besides, a home loan EMI calculator is faster and more accurate than manual calculations.
The EMI calculator allows you to assess the additional costs like down payment, processing fee, stamp duty, etc. which are not covered by a home loan.Free and easy to use, a home loan EMIcalculatorcan assist you in making optimal financial decisions.
Finally, prepare the following documents before you apply for a home loan –
- KYC Documents: Identity and address proof such as PAN card, Aadhaar card, voter ID card, valid passport, etc.
- Income Documents: Primarily used to determine your repayment capacity; including documents like payslips, tax returns, bank statements of the last six months, etc.
- Property Documents:Lenders also reviewproperty documents, including title deeds, agreement to sell, NOC, etc.
Once your home loanapplication is approved and sanctioned, the loan amount is disbursed. Lenders disburse the full home loanamount to the property seller’s account only.
Over to You
Nowthat you know everything about – what isa home loan, how to apply for a home loan, etc. – you can easily avail of housing financeonline. Check out the home loan interest rates offered by different lenders and compare loan terms before closing the deal.
Get a home loan at attractiveinterest rates, with convenient repayment terms and tenure.Best of all, our documentation process is minimal and smooth for a hassle-free transaction.