Credit Score/CIBIL Score: Credit score is the
reflection of your credit worthiness and is a major
factor in deciding home loan eligibility. A credit
score above 750 and close to 900 is considered good
for home loan eligibility. It increases the chance of
loan approval. It also improves the chances of getting
loans at better terms and rates. A credit score below
750 or close to 300 is considered poor. This score
might lead to loan rejection or make you pay higher
interest rates
Applicant’s Age: The minimum age to apply for a home
loan is 18 years and in general the maximum age at the
time of loan maturity should be 60 years in case of
Salaried Applicant and 70 years in case of Self
Employed, however with deviation and based upon bank
norm, particular financial institution may strech
maximum age capping little bit. A younger loan
applicant can opt for longer loan tenure. This is
because younger loan applicants have longer working
years than the ones nearing their retirement age.
Employment/Business Stability: For many lenders,
salaried individuals should have at least two years of
total working experience in order to be eligible for a
home loan. In case of self-employed Individuals, the
business should have vintage of at least 3 years
Understanding payment schemes for under construction
properties : to the construction stages of the
property. When you purchase an under-construction
property, your bank may link the disbursal of home
loan to the construction stages of the property. In
such cases, you will either be asked to pay pre-EMI OR
given an option to choose between pre-EMI and full EMI
payments. Usually when a borrower takes home loan for
an under-construction property, the loan gives a
moratorium of up to 3 year during which time the
borrower only needs to pay the interest component of
the loan. A 3-year moratorium takes into account the
fact that during this time the construction of the
house is complete and so hereafter the borrower can
pay interest as well as the principal through equated
monthly instalments (EMI). But if the construction is
delayed beyond the moratorium period, the borrower
ends up paying principal as well as interest.
As you are probably aware, Equated Monthly Instalment
(EMI) consists of Principal and Interest components.
Pre-EMI is just the interest portion on the disbursed
loan amount that you pay until the full disbursal is
done. i.e., your home loan behaves like an
interest-only loan on the disbursed amount until the
completion of construction. Your EMI payments start
after the pre-EMI phase. Until then, your money does
not reduce even a paisa of the outstanding loan
amount.
Many Balance transfer of Home Loan are coughing up
high interest rates. If you’re amongst them, you
should consider shifting your home loan from your
existing lender to a new one. This facility is called
a ‘balance transfer option’ and many banks offer this
facility nowadays. Doing so will decrease the monthly
EMI you are paying towards your loan and will bring in
savings.
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