When we talk of numerous Financial-benefits, Property as an asset helps to reap various benefits. Whether you are finding your new home or a property for investment purposes, banks are always there to provide you with Loan opportunities.

If you do not want to liquidate your savings or are short on cash, a home loan is an excellent form of financial assistance. Banks always help you fulfill your dream of purchasing a home by providing you loan, which can be repaid in easy monthly installments with the option to choose the repayment tenure at your convenience.

But before you begin applying for a home loan, let’s check these essential points that could help you to ease the application process and simplify loan repayment.

1. 1 - Loan Eligibility: - You can check your Loan Eligibility by calculating the EMI. Banks limit the installments to 40-50% of the borrower's salary or monthly cash income. The eligibility will decrease if you have existing liabilities, say another loan. Some banks are sensitive about your dependents because a higher number means lower repayment capacity. Besides the financial strength, your profile reflects how much the banks agree to lend.

   Let’s take an example: - Mr. A (an employee with a suitable source of income) and Mr. B (a self-employed with inconsistent earnings) both apply for a loan. Mr. A will find it relatively more straightforward to get a loan than Mr. B. Your age defines how many payments you have, which will determine your re-payment capacity and the tenure of the loan.

   The income of the Co-borrower is clubbed (combined) while considering the eligibility for the loan, so having a co-applicant allows you to get a higher loan. Banks usually limit the loan amount to up to 90% of the property's value.

2. 2 - Tenure of Loan: - Home loan EMI decreases as you increase the loan's re-payment tenure. Usually, banks give loans for up to 30 years of term, based on your age. With a long-tenure home loan, you can buy a bigger and better house than what you can buy with a short-term home loan.

3. 3 - Documentation requirement: - Documentation needed for a home loan can be categorized as: -
   • a) KYC Documents: These include identity and address proofs. Required documents are a Valid Passport, Voter ID card, Aadhaar card, etc.
   • b) Credit/Income Documents: : These documents can help the lender assess your loan eligibility. You can submit your salary slips for the last three months in case you are employed, but in case you are self-employed, you can submit income tax returns along with the last three year’s income computation.

   • c) Property Documents: The agreements to sell, the title deeds, etc., are included in this type of document. Original property documents such as title deeds, agreements to sell, own contributions receipts, etc., are essential property papers because they are mortgaged with the lender as a security interest on the financed property.

4. 4 - Types of Interest Rates: - Different types of home loans that are available are: -
   • 1. Adjustable/Floating Rate Loans: The interest rate is linked to the RBI’s regulated benchmark rate under this loan category. The interest rate changes proportionately to the changes in the benchmark rate.
   • 2. Fixed-Rate Loan: Under this category of loan, the interest rate is fixed at the time of taking the loan. This rate of interest is applicable for the whole tenure of the Loan.
   • 3. Combination Loans: Under this category of loans, there is a combination of Fixed Rate Loan and Floating Rate Loans. These Loans offer some part of the loan at a fixed interest rate and part at an adjustable or floating rate.

5. 5 - CIBIL score: - Banks have to manage the risk of giving loans to individuals. They use multiple tools to validate the risk category, and CIBIL is their primary tool. CIBIL is a credit rating organization that rates individuals based on their past behaviours around taking and repaying credit. It is essential to maintain a credit score. CIBIL score ranges between 300 and 900. Any score between 300 and 549 is considered poor, and anything from 550 to 700 is considered good. So, if you have a CIBIL score of more than 750, you can quickly get the loan, based on your monthly cash flows, and get even better interest rates.

   In Conclusion, it can be said that purchasing a house is a massive step in One’s life; it is also the most satisfying experience one can have in their life. Most people buy their homes, but the sky-rocketing housing prices always keep them from purchasing their dream homes. Getting a home loan is handy as it provides the financial foundation for your dream of owning your own home. A home loan is the best way to help you own your house. Once you are clear with all these points, apply to the Lender that offers a complete Home Loan package. You can have many attractive Home Loan Schemes that can suit your requirement.

   A borrower should be cautious before getting a home loan as there are so many financial institutions ready to lure you with so many offers, so be sure about the deal you get agreed to, and yes, before buying a home loan, read all the documents carefully.

   Further, The Eastern Park also assists its customers to put loan applications with all major banks.