Home Loan is the sum of money borrowed from a bank or any financial institution to buy a house or property. It is also termed as mortgage loan. This amount plus the interest rate is repaid to the owner on a monthly basis in the form of EMI . The lenders of home loan in India provide a maximum of upto 80% of the agreement value of the house. While considering eligibility for Home Loan the banks do not include charges like stamp duty, registration charges etc. The valuation of loan done by the banker’s valuer is lower than the actual cost.
The maximum time period for the repayment of loan depends on the age of borrower. In India the Home Loans are classified as Fixed Rate and Floating Rate. As the name specifies the fixed rate is the interest rate which does not change and hence not famous among the lenders. The Floating Rate changes according to the change in REPO rates or in bank’s base rate (now MCLR rate). The borrowers use fixed interest rate when they have a surity that this is the lowest interest rate.
In India there are many banks and housing companies like ICICI, SBI, HDFC etc which provide home loans. These institutions work according to RBI guidelines and national housing bank. When planning to buy a property if you have any queries regarding the amount of home loan to be paid every month or the number of EMI you will have to pay then you can take the help of EMI calculator. It helps you to calculate the amount of EMI to pay the loan to the lender every month. The home loan EMI to be paid will depend on various factors like loan amount, tenure for which loan is taken and interest rate charged by the bank. Thus, it is a useful calculator for calculating EMI payments. Before purchasing a house you should look for an appropriate lender because the cheapest interest rate cannot be the deciding factor. You have to choose from a plethora of offers on Home Loan.
Checking your home loan eligibility with other banks is essential because every bank uses its own ways and means of calculating eligibility. Adding your spouse’s income increases your home loan eligibility. Below mentioned factors should be taken care of-
1. Banks keep EMI to income ratio to 0.45 to 0.50 as income plays a crucial role.
2. The longer the tenure of loan the better it is.
3. Higher the interest rate, lower will be the home loan eligibility and vice-versa.
4. In case of existing loans, the home loan eligibility comes down to around 0.05.
Analysis of the above factors will determine the home loan eligibility.
Loan from banks like ICICI, SBI, HDFC etc is the safest option for fulling your housing needs. The positive point is that the women are given more privileges than others. There are different forms of home loan available to purchase new home or plot, for construction purpose or renovation etc. but the borrower of loan decides the purpose for which he needs it. It is always better to first compare the home loan and then go for the final decision. As mentioned earlier that home loans are compared on the basis of various factors like EMI eligibility , interest rate and EMI calculator but various other factors cannot be ignored–
1.Mortgage Deed charge an important fee to be paid while taking home loan is 0.5% of the loan amount in some locations.
2.Legal fee which is charged to verify the legal status of property.
3. In addition to these charges there are others as well such as stamp duty, documentation charges and registration fee.
In nutshell, we can say that having a dream house is the most valuable possession of your life so it must be selected with full caution and after careful analysis . Thus, comparing the home loans of various banks is a great way to make a wise choice.
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