The COVID-19 pandemic has prompted central banks in the significantly affected countries to dive into the scene and take control of the economy. To rejuvenate the economy, central banks around the world have taken various steps. The Reserve Bank of India is not far behind either. It has recently slashed the repo and the reverse repo rate to record low levels in many years.
Go through this article if you want to know how your home loan profile would look like in the post-rate cut era and how a home loan calculator can make your life easier.
What is the Eligibility Criteria for Home Loan?
The post-rate home loan eligibility criteria have become even more comfortable. You need to fulfil the following requirements to be eligible to apply for a home loan:
- You must be a salaried professional employed with a public or private enterprise or a self-employed professional with a stable flow of income.
- You should be an Indian citizen or a Person of Indian Origin (PIO).
- Your monthly income should be beyond the threshold limit set by the lender. You may check a home loan calculator to know the latest eligibility criteria and interest rates.
- Your age must be less than 70 on loan maturity.
- Your CIBIL score should be above 650.
Other than the above, your property’s status also plays a role in determining your eligibility criteria for a home loan.
How Much of the Property Value Can You Get as a Loan?
For a home loan amount of up to INR 30 lacs, you can get up to 90% of the property’s market value as a loan. If the loan amount is above INR 30 lacs, but below INR 75 lacs, the maximum funding will be 80% of the property’s value. For an amount over INR 75 lacs, the loan amount will be up to 75% of the property’s value.
What is the Home Loan Interest Rate at Present?
The home loan interest rates are dependent on multiple factors like credit score, loan value, tenure, repayment status, debt to income ratio, among others. Generally, the rates start from 8.60% p.a. and can go up to 9.95% p.a.
What Documents Do You Need to Submit to Avail of a Home Loan?
Irrespective of whether you are a salaried or a self-employed professional, you need to submit the following documents to avail of a home loan. You may also check the latest document requirements by opening a home loan calculator.
- Application form with the latest passport-size photograph
- Age proof
- Identity proof
- Address proof
- Educational degree certificate
- Three months’ salary slips (for salaried)
- Three years’ income tax returns (for self-employed)
- Business profile with profit and loss statement (for self-employed)
- Form 16
- Six months’ bank statement (for salaried)
- 12 months’ bank statement (for independent)
- Processing fee cheque
- Property documents, including title deed and approved plan
What is the Minimum Downpayment Amount?
The minimum downpayment amount is 10% of the property’s market value, which includes stamp duty and associated costs. However, by increasing the downpayment amount, you can avail of a lower interest rate and flexible repayment tenure.
What is the Home Loan Repayment Tenure?
The maximum tenure of repayment of principal and interest is 30 years. You may pay through post-dated cheques or electronic clearing system.
Conclusion
The home loan industry is a dynamic one. As it is highly reliant on the government, any changes in government regulations impact the loan terms and associated fees. Use a home loan calculator to stay updated with the rules and regulations.
