Affordable Home Loan rates in India are now within able reach

                                                                                         

A few years ago, not all of us were lucky enough to own a home of our own but things have changed in the recent past. With the Indian banks and financial institutions offering home loans at low interest rates, many of us have got a home for ourselves while many others are in the 'queue' of getting their home loan sanctioned.

One cannot deny the fact that the most deciding factor for the borrowers is nothing but the home loan rate. Indian banks and financial institutions have been lenient enough to reduce their profit margins to allow the loan borrowers to have a home of their own. In this article, we would be having a close look at the eligibility criteria for getting a home loan with a low interest rate in India.

A home loan is dependent on many factors such as income and repayment track records besides the total cost of property to be purchased. One should not forget that the housing loan ability is primarily decided by the income and expenditure patterns over a specific period of time.

In most of the cases, the home loan eligibility in lakh is equivalent to an amount calculated by the bank/financial institution as net disposable income for the purpose of home loan repayment. This amount is then divided by the home loan instalment/lakh for the loan tenure. For example - If a prospective borrower is earning Rs. 10,000/- per month and has expenses amounting to Rs. 7,500/- then his net disposable income is Rs. 2,500/-. With an interest rate of 10%, the instalment per month for every Rs. 1 lakh will be Rs. 1,000/-. The eligibility criteria will be calculated by the following formula:

Home loan eligibility amount = Rs. 2,500/1000*1 lakh = Rs. 2,50,000 lakhs

This calculation is followed by most of the banks. However, the eligibility criteria does depend on many other factors as well. If a borrower has a higher repayment capacity, he will enjoy a higher loan eligibility and vice-versa.

Now that we have learnt a few lessons about the home loan eligibility criteria, let us have a close look at the documents to be submitted.

Copies of the last 2-3 years' Income tax returns
Form 16/16A
Copies of last three months' bank statements for the last 3-6 months
Age, residence and employment proofs
Salary slips, if salaried
Proof of income, for self-employed
Photograph(s)
Post-dated cheques and ECS form & consent for the loan agreement(after the loan has been approved)

The basic purpose of collection of these documents is to ensure that the borrower will repay the loan amount and applicable interest within the specified period in the form of monthly repayments. The banks or financial institutions, in the meanwhile, check these documents for levels of activities, cheque returns, cheque bounces, average bank balance, record of previous repayments (if any) and for identifying age, residence and employment status to name a few. Many lenders even seek the services of Credit Information Bureau (India) Limited (CIBIL) to get a complete insight on a borrower's past financial track record.

A borrower can easily take flexible home insurance plans and affordable home loan rate, India has changed itself from a reluctant economy to a progressive economy by offering many schemes, plans and policies to stimulate the loan markets. With an Online application, the borrower can ask the lender to grant a loan by just clicking the PC mouse.

Thus, it can be easily said that if a borrower is genuine in his abilities and has the ability to repay the loan then the lender will surely give the moments of happiness associated with owning a home without any hassles.

About the author:
For more information about home loans and home loan interest rate plz visit our site http://www.paisawaisa.com


Article Source: http://www.Free-Articles-Zone.com