LoanExpertise.Com

19/08/2021

Home Loan Guide for First Time Home Buyers in India

A home is an aspiration for individuals and families. It is much more than a brick-and-mortar setup that has four walls and a roof. Owning a home is an achievement and offers social status and recognition to individuals. A home is a priceless emotion, but it comes with a hefty price tag. It is not easy to buy a home without a smooth financial flow or support. That is when a home loan seems to be the right financing option. A home loan is a perfect solution to finance your home within a few days. It is a secured form of a loan with a high rate of interest and charges. There are various banks and non-banking financial institutions that offer a home loan to a borrower with good eligibility criteria. However, the eligibility criteria for getting approval are high and down payment is a must. Homeowners need to arrange for the down payment, as that will not be included in a home loan. Before you get involved in borrowing, you must know every small detail about a home loan and how it works.

What is a home loan?

A home loan is a specific loan that is used for purchasing a home. It is a lump sum amount that is sanctioned by a financial institution to the homeowner for meeting the home loan eligibility criteria. A home loan includes a huge sum of money and the eligibility criteria for approval is very high. An excellent credit score, impressive income, good property, down payment, and credit records are important aspects. The repayment scheme is monthly instalments, and one needs to choose the right tenure for a suitable EMI. A home loan is a long-term commitment that takes a good part of your income for more than 15 years. It is a secured form of loan because a loan provider can recover the amount if the borrower defaults on the loan.

Home loan documents

If you are planning to take a home loan, you need to arrange all the documents. Documentation is important to process the loan application, so here are a few of the documents that you need to arrange.

• Employer Identity Card
• PAN/Passport/Driver’s License/Voter ID card
• Permission for construction
• Occupancy Certificate
• Payment Receipts or bank A/C statements showing all the payments made to the Builder/Seller
• A recent copy of Telephone Bill/Electricity Bill/Water Bill/
• Last 6 months Bank Account Statements for all bank accounts held by the applicant/s
• If any previous loans from other banks/lenders, then loan A/C statement for the last 1 year
• Salary Slip or Salary Certificate of the last 3 months
• Business address proof
• IT returns for the last 3 years.
• Balance Sheet & Profit & Loss A/c for the last 3 years

Why go for a home loan?

No collateral: A home loan is a secured loan as a loan provider can recover the defaulted amount from the property itself. There is no need for any collateral attachment at the time of application.

Easy disbursement: The loan industry is developing, and non-banking financial institutions are now working in a better way. The disbursement is really quick and the chances of approval are high and better than with traditional banks.

Lump-sum amount: A home is a hefty expense. A home loan helps the homeowner with almost 90% of the property amount. It is a great help that can help your dream come true.

Easy repayment: A huge home loan is broken down into monthly instalments in the form of EMI. Paying the EMI every month is not a big burden. This has encouraged many dreamers to come forward and opt for a home loan and leave the rented shelters.

Eligibility criteria for home loans

Are you planning to get a home loan? If yes, you need to start working on the home loan eligibility criteria really early. An excellent credit score above 750 and an impressive income will be very important in getting approval. A good property is a good convincing factor because a loan provider can recover in the case of default. A high income is important because the home loan EMI will be really high. An individual with a good income can manage EMI along with other fixed obligations and expenses. Aim for a good credit score with regular payments, healthy credit behaviour, and no defaults.

Where to apply for a home loan?

A home loan is a prevalent type of loan that every homeowner experiences. It makes the purchase easy with a one-time lump sum disbursement. There are offline and online financial institutions like banks and non-banking financial institutions that can offer a hassle-free borrowing experience. The rate of interest is low, documentation is minimal, and approval is quick. The chances of getting secured home loan have become really easy with a non-banking financial institution. Click and apply to make your dream of owning a home come true!

Wrapping up

A home loan is a great financing option that helps an aspiring individual to get his own home. However, it is a long-term burden and should be taken after considering the repayment capacity. Opt for a low home loan interest rate by comparing the products and financial institutions. Keep a home loan calculator to get the best home loan deal!

23/02/2019

Availing a top-up will also mean less documentation and easier processing, compared to a fresh personal loan.

A home loan top-up is always better than a personal loan. It offers better rates, longer repayment terms and tax benefits.

There are so many loan options in the market that it’s easy to get confused. People often go for a personal loan when they need urgent finances, and land up with a heavy burden. Instead, if you have an existing home loan, a top-up could be the ideal solution to cover a crisis.

What is a home loan top-up?

A top-up loan is an additional loan amount you borrow from the bank where you have a home loan and it can be used for any purpose.

Suppose you have taken a Rs 30 lakh home loan at 10 percent interest for 20 years three years ago. So if the current market value of the said property is Rs 50 lakh, 70 per cent of it will be Rs 35 lakh (70 per cent of the value, the maximum loan borrowing allowed against the property).Three years into the loan, you would have repaid into the principal an amount Rs 1.7 lakh, leaving an outstanding of Rs 28.3 lakh. In this scenario, you would be eligible for a maximum top-up loan of Rs 6.7 lakh (Rs 35 lakh less the outstanding principal amount, Rs 28.3 lakh).

13/11/2018

Get the best deal on Home Loan Today !!!!!

In the simplest of words, a housing/ mortgage or home loans are Loans acquired from a financial institution to purchase a home. There goes a wonderful saying, "A house is made of bricks and beams, a home is made of hopes and dreams." These hopes and dreams are fueled extended by financial institutions and providers, builders and developers during the festive seasons.

Get the best deal this festival season - Be on the hunt for the BIG3

• Interest rates
• Tenure
• Processing fees and GST Benefits

You could also combine the deals from providers. For instance, you could get GST Benefits on both your home loan and on the property or real estate you opt to purchase.

Home Loan Interest Rates and Calculator

Unlike any other loan, deciding about a home loan, its type, interest rate and other details associated with it takes thorough research. This is made easy with a home loan EMI calculator. A home loan EMI (equated monthly installment) calculator is easily available online that gives you the correct EMI amount basis the Principal amount and interest rate. Moreover, interest can be repaid through either a floating (adjustable) interest rate or a fixed interest rate.

So, what are you waiting for? With all the essentials in your arsenal, you can march forward this festive season and seize your best buy right away! Connect with our home loan provider team today and make your dreams come true with loanexpertise.com

07/11/2018

Light A Lamp Of Love!
Blast A Chain Of Sorrow!
Shoot A Rocket Of Prosperity!
Fire A Flowerpot Of Happiness!
Wish U And Your Family A Sparkling Diwali!

05/11/2018

दीपक में रौशनी, रौशनी में प्रकाश,
पुलकित है धरती, जगमग है आकाश,
पटाखों का शोर, दीयों की कतार,
विराजे मां लक्ष्मी आपके द्वार
Happy Dhanteras 2018

14/08/2018

Know the Parameters Bank Consider in Your Home Loan Application

Know the Parameters Bank Consider in Your Home Loan Application It is always best for a home loan applicant to consider the banks who function under the purview of governmental rules to pass the loan application process in legitimate ways. But banks adopt stringent measures while evaluating a home l...

29/07/2018

Factors That Determine Your Eligibility For a Home Loan

Factors That Determine Your Eligibility For a Home Loan When it comes to purchasing a home, there are plenty of options you can consider to finance this purchase. Amongst the several options, the home loan is one of the most popular choices. Not only are there several lenders who offer home loan in....

28/07/2018

Factors That Determine Your Eligibility For a Home Loan

When it comes to purchasing a home, there are plenty of options you can consider to finance this purchase. Amongst the several options, the home loan is one of the most popular choices. Not only are there several lenders who offer home loan in India, but they also offer it at different competitive rates.

However, each lender will have different criteria for evaluating a loan application. These criteria determine your eligibility for a loan application. Here are a few factors that almost all lenders will consider:

Disposable income:

One of the most important factors that a lender will consider is your disposable income. It is derived by deducting your statutory deductions, regular expenses and existing EMI's from your overall gross income. Overall, your home loan EMI should be within 40% of your monthly disposable income. If your individual income is low, you can always apply with a co-applicant to increase the overall gross income in order to get the loan amount you require.

Credit history:

Your credit score determines your creditworthiness. Lenders consider your credit score as the means to judge your creditworthiness. A low credit score will indicate that you are a risky investment. It also indicates that you may have a current debt value that you need to pay off before applying for another debt, such as the home loan. The appropriate credit score of 750 and above is considered as a good score. However, other lenders may have different scoring patterns and a fixed yardstick for their own version of their acceptable good credit score.

Compliance with legal norms:

When it comes to opting for any of the home loans in India, lenders will first verify details of the property which you are taking the loan. They provide loans to facilitate the purchase of properties that have been legally cleared by the local authorities, especially if they possess a clear and valid title. Some lenders even offer special loan packages or rates on properties that have been listed in their approved database of properties.

Occupation stability and continuity:

A stable job or income source ensures a continuous and steady income. This income, in turn, ensures that the borrowed funds are repaid in a timely fashion. Lenders for certain signs and factors that indicate a stable job or income source. They also consider how long you have been working with your present employer to calculate how steady you are in your employment. Switching too many jobs during your career will create a negative impression. Additionally, lenders give more preference to government employees over professional individuals in private sector companies.

Apart from the above-mentioned factors, there are plenty more, that a lender will review. Keeping these factors in mind will go a long way to ensure that not only do you get the ideal loan rates in the market, but also allows you to negotiate for the best rates in the market.

01/04/2018

Thinking of a Home Loan Refinancing? Now is the Right Time!!!

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Last year, lenders reduced Home Loan rates so much so that the figure was the lowest in 6 years. Besides, in the time that has passed since 2015, the RBI has cut the repo rate by a total of 175 basis points and this benefit is slowly yet steadily trickling down to you. Post demonetization in late 2016, banks and NBFCs found themselves with an influx of cash that they could use to offer you an attractive interest rate on your loan. So, now is a good time to refinance your Home Loan and avail a host of benefits.

Understanding Your Interest Rate

Before you decide whether you should refinance your Home Loan, it is important to understand whether your Home Loan has a base rate or an MCLR or Marginal Cost of Funds-based Lending Rate. If you took a loan between 1 April 2010 and 31 March 2016, it will have a base rate. With such loans, when the repo rate is cut, it may take a long while for your loan to accrue the benefit.

If you have taken your loan post 31 March 2016, however, your loan follows the MCLR regime. This means that your interest rate will change quickly once the repo rate changes, thereby improving your benefits. Depending on the reset clause, which is usually 6 months or 1 year, the interest rate of your loan will be reset regularly, in line with the prevailing rate. As a result, you can make the most of rate cuts in a timely manner, and reduce your financial obligation.

So, first, start by shifting your loan to an MCLR regime to make the most of the cuts in Home Loan interest rates. Next, evaluate whether it is a good idea for you to refinance your Home Loan.

Should You Refinance Your Home Loan?

While other factors may point you in the direction of refinancing, evaluate your own situation before considering switching your Home Loan to another lender by carrying out a Home Loan Balance Transfer. You might have several underlying reasons for considering a refinance. It is important that you think them through.

Is it to benefit from a lower rate of interest?

Here it is important to calculate your actual gains instead of simply looking at the lower interest rate. This will allow you to see if your savings are significant. As a result, you will be able to ascertain if you should refinance now.

Is it to lower your monthly outflow?

While you can refinance your loan to seek a lower EMI, it is important to understand the complete picture. This move will increase the total cost of your loan as it will take you longer to clear the loan and so, the total interest payment will be higher. But, if you seek more flexibility on a monthly basis, this is a worthy benefit to consider.

Is your current mortgage at the right stage?

It is important to evaluate how far you are into the tenor before deciding to refinance. It is ideal that you refinance your loan within 4 or 5 years of the tenor. During this period, the interest component of your EMI is highest. So, refinancing your loan will help you lower this greatly. If you’re towards the end of the tenor, refrain from refinancing as the cut in interest rate won’t reflect in actual monetary benefit. This is because you have already paid most of the interest.

Once you’re convinced about refinancing your Home Loan, consider following the following steps.

Negotiate with Your Current Lender

Before you decide to refinance your Home Loan by seeking a Home Loan Balance Transfer, make it a point to talk to your existing lender. If you are an ideal customer, with a good payment record, good credit history and no defaults, you may be able to renegotiate the terms of your Home Loan. You can either request a decrease in your loan’s interest rate, or lengthen the tenor to suit your affordability. Since you don’t have to pay any legal or processing charges, this may work out to be cheaper on the whole.

Consider a Home Loan Balance Transfer

On speaking to your current lender, if you find that the financial institution is being rigid about the terms of the loan and not offering you any relief, you can carry out a Home Loan Balance Transfer and shift to another lender. First, research several lenders and examine the interest rates, processing fees, legal fees and mortgage fees. Ensure that the new lender offers you favourable terms especially with regards to prepayment and foreclosure. Once you select a new lender, get an NOC (No Objection Certificate) from your current lender as well as documents pertaining to your ongoing loan. Then, fill up the new application form, submit the necessary documents and transfer your loan.

You can use the low interest rate after a Home Loan Balance Transfer to repay the loan over a shorter tenor. This will create substantial savings especially with regards to the interest that you pay. Or, you can keep the tenor the same and simply enjoy lower EMIs. Then, invest what you save each month and maximise your wealth parallelly.

29/03/2018

Credit Score: Here are five major factors that can influence your loan approval.
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A credit score is a 3-digit rating (ranging between 300 and 900) that lenders use to determine whether an individual is eligible for a loan or a credit. This rating is generated by leading credit bureaus of India like TransUnion CIBIL, Equifax, Experian India, CRIF High Mark etc. Most of the financial institutions use TransUnion CIBIL’s score to underwrite loan applications.

A good credit score can get your loan approved faster and a bad one can equally ruin your financial standing in the future. This is the reason why a credit score plays an important role in all the major financial decisions of your life.

In accord with one of the leading credit bureaus of India, TransUnion CIBIL – 79 percent of loans are approved for individuals having a score higher than 750. If a credit score is 700 or above, it is considered to be a good score. A good score can enhance your loan approval and provide great benefits on interest rates.

Some of the major factors which make and break a credit score are – credit history, credit balance, payment history, and recent new credits and so on.
Let us take a look at the 5 major factors which highly influence a credit score. Your loan approval can be a seamless process if you can manage these factors well.

Outstanding balance: Your outstanding balance is a factor that needs to be balanced well. Because it is used by the lenders to determine your credit utilization rate. It is a ratio of your outstanding credit to your actual credit limit. Many people misunderstand this ratio and keep their outstanding debt at zero. However, if lenders see the debt at zero, they might think that you are not capable of paying the loan and eventually you are not taking any credit. It would be ideal to keep the debt less but not nil.

For example, the credit limit of an individual is Rs. 80,000 and the outstanding credit balance is Rs. 25,000. It is a better deal than having a balance of Rs. 65,000 against a credit limit of Rs. 80,000.

Payment history: This is the most important factor that makes your credit score. The payment history in your credit score determines whether you have done all the payments on time. In case you delayed in paying a bill, how much delay it was. Because the later you took, the more negative impact it creates on your credit report. This factor can be a major threat to your score if it displays any collections in your account.

Types of credit (secured vs unsecured): Various types of credits include home loan, property loan, credit cards, and personal loans and so on. Multiple credits create a positive impact on the credit score. This does not, in any way, should mean that one should create an account in all the individual variations. Because the credit utilization ratio needs to be maintained as well. If you won’t be able to keep the ratio, multiple credits are of no use.

If you are new to credit: There may be cases where the borrower has never entered into the credit world. Or if the last credit taken was more than 24 months ago, then his score would be -1. The allotment of credit score begins with (-1) to (0 – which is after completion of first 6 months) to (between 300 and 900). In case you are new to credit, we would highly recommend you to either start with one credit card or one secured loan or an unsecured loan. And if you manage all these smartly by paying them on time and in full, you will develop a good credit score after a certain period of time.

Recent new credit: Too many inquiries represent different behaviors. If it is for a Home Loan, say Rs. 1 crore, it shows that you are negotiating with Housing Finance Companies (HFCs). However, if it is for a personal loan or credit card in a very short period of time, it represents credit hungry behavior and will have a negative impact on the credit score. There are higher chances that you will be labeled as ‘a risky borrower’.

Vintage: Since how long have you been taking credit? If a lender finds out that you started taking credit for quite a long time, he will find out the month and year of credit. If you had borrowed for more than once, the average obligations will be taken into consideration. Not for forget, if you delayed in any of those payments, then how long you took to repay. So, if you have taken multiple credits for a long time, it is a positive step, but not if you failed to pay those on time.