Growth of Home loans with Realty Sector

The growth of realty sector in India is mainly due to the reason of availability of land, abundant job opportunities and easy finance options. The easy availability of finance option is due to the reason of easy availability of the home loans, i.e. offered by various banks, housing finance companies and financial institutions. The hike in salary has increased the purchasing power of the people. The person avails a home loan to own their home or for investment purpose. The easy availability of the home loan and increase in income, increase the demand of the realty sector, with this the builders are also get motivated to build or construct more flats and apartments.

 

The growth of the realty sector is the most significant factor in the growth of the home loan market. All banks and financial institutions are ready to meet the requirements of the borrowers. They provide custom made solutions according to the customer profile and act as a complete package for the home loan borrower. The home loan interest rates are also low and even people can also afford these interest rates.

 

There are different types of home loans that one can avail, such as for the purchase of the property, for construction of the house, for home improvement, for repairing the home, for renovation of the house, for increasing home equity, etc. The person can avail loan for any kind of property, i.e. residential or commercial. All profile people, i.e. salaried individual, self employed person or professionals and even NRI can avail home loan. The documentation is different for a different set of people. One can take information regarding home loan through internet and can even calculate his monthly EMI through EMI calculator, as most of the banks provide this facility on their websites.

 

The home equity loan is a new product that is offered by various banks. In this loan, the person can again mortgage his property, i.e. already mortgaged to any lender for availing loan. The person can use this loan for marriage purpose, medical emergencies, higher education, purchasing of any consumer durable goods, to pay off debts, to invest in realty sector etc. Usually banks give 65% of the cost of the land/property/house.

 

The returns on investment in the real estate are far better than the returns in the stock market. All these factors have grown the demand of realty sector, and in turn, it has grown the demand of home loan.

 

Eligibility Criteria for Home Loan

Availing a home loan in India is not at all easy task, as the person has to satisfy various eligibility criteria for getting the home loan. The various eligibility criteria for getting the home loan, are discussed in detail, in the following article; these criteria are:

1. 1.      Financial background of an applicant

The loan amount is decided primarily upon the paying ability of the applicant and the co-applicant. Financial background means the savings of the customer, collateral and working details of the customer.

1. 2.      Income of an applicant

Banks usually consider up to 50% of the monthly income of all applicants for the EMI amount while deciding the loan amount. This percentage may decrease if the person has other obligations also to meet from his monthly income. These obligations decrease the overall loan amount of the customer. Therefore, while applying for home loan one should clear all his debts, so the person can avail maximum loan amount.

1. 3.      Applicants Profession

The lenders also consider working details while deciding the loan amount, as it shows the repaying ability of the customer. The bank prefers salaried person more than the business person.

1. 4.      Age of the customer

The age of the customer plays a vital role while deciding the loan amount. The minimum age required for availing the home loan is to be or above 21 years. The person can avail loan for maximum up to the age of 60 years for salaried person & for self employed is 65 years.

1. 5.      Value of the property

Always remember, that the bank can provide a loan amount only up to 85% of the market cost of the house/property/land/home. The remaining 15% value of the home is paid by the customer as down payment. It is so because bank want to minimize the risk of lending the loan amount as they want customer has some interest in purchasing the property.

With this article, the person comes to know what documents the person has to prepare for availing the loan. The person has to submit income proofs, age proofs, some saving details, identity proofs, and employment details. If the customer satisfies all these criteria, but the creditability is poor, then also the loan application gets rejected. Therefore, one should check their credit report and settle all pending dues before applying for the loan.