Rents in Indore have increased by almost 9% since last year. A 3-bedroom apartment in Indore will cost Rs. 20,000 per month. Additionally, landlords charge a hefty security deposit and tenants also have to pay brokerage.
Individuals moving to this city can become financially burdened with such expenses. Compounded over a lifetime, the total cost adds up to an amount that is considerably higher than the price of purchase.
Hence, opting for a housing loan in Indore can be more beneficial to such individuals. Rather than paying high rent, they can pay the loan EMIs and own the properties themselves. This is one of the primary reasons why you should opt for a home loan.
However, the whole process of availing such loans might be a little overwhelming or intimidating for first time home buyers. Hence, they need to comply with some simplistic terms and conditions before applying.
Eligibility Criteria For Home Loans
Listed below are things that dictate whether the lender will approve your loan application. The amount you are eligible for also depends upon the following factors.
- Income: The economic situation or annual income of the borrower is a prime factor that affects the approval of home loans. You must apply for an amount that is suited to your income. Many applicants make the mistake of applying for a loan amount that is not feasible as per their current level of income. This leads to the outright rejection of the application. Using a home loan eligibility calculator will let you know about the maximum amount you are eligible for. Moreover, availing an amount which is more than your eligibility will force you to make additional home loan interest payments and thus, put stress on your income.
- Credit rating: Lenders use credit ratings to evaluate the borrowers’ eligibility. The most popular credit rating is the CIBIL score. Financial institutions and companies look for a CIBIL score of at least 750 and above to approve any loan. You can check your CIBIL score for a home loan by visiting their official website. If you have a low score, you can take the following steps to improve your score and get an approved home loan offer:
- Pay credit card bills on time.
- Avoid spending more than 30% of your credit limit.
- Check your credit information report for any errors.
- Report the errors to the concerned authority.
- FOIR: FOIR stands for fixed obligations to income ratio. It refers to the percentage of fixed payment obligations like rent, EMI payments, etc. against your income. If your FOIR is already more than 50%, chances are, your application for a new loan will be rejected. Try to keep your FOIR limited to 30%. This will increase the probability of securing an approved home loan in Pune.
- Eligible amount: The home loan amount is generally based on several factors like income, existing obligation, location of the property etc. You can use an eligibility calculator to check home loan eligibility & know the amount you can get for before going for a home loan online application process.
- Required documents: You will be needed to furnish the following documents to get your funds disbursed. The documents are:
- Identity proof – Voter card, Aadhaar card, PAN card, etc.
- Income proof – Bank statements, salary slips, ITR returns, etc.
- Address proof – Electric bills, property tax bills, etc.
- Property documents – Papers property to be mortgaged.
- Age of applicant: Banks prefer applicants that are within the age bracket of 24 to 60 years. It also has a severe effect on the EMI of home loans. You can use an EMI calculator to know your EMI obligations.
Abiding by these terms and conditions will help first-time property buyers to avail a home loan easily. They can get their loans sanctioned quickly and avail the funds within 4 days.