Are you in the market to buy a new home? But do you feel it is a little too heavy on your pockets? Well, there is a way you can buy a new abode without financing the entire purchase by yourself. Housing loanshave now made it incredibly easy to own the house of your dreams. Wondering how? Here’s everything you need to know.
What is a home loan?
Ahousing loan, also known as a mortgage, is a sum of money borrowed for buying, constructing, or repairing a house. It is made available at a specific rate of interest which has to be paid along with the principal amount as EMI. Moreover, the property in question can be commercial or personal in nature.
Types of home loans
- Home purchase loan – This is the most popular type of home loan. You can avail of a home purchase loan to buy a new or pre-owned home.
- Home construction loan – This loan is designed for people interested in constructing their dream home instead of buying a pre-constructed one. However, the approval process for this loan is slightly different as it considers the plot’s cost as well.
- Home improvement loan – Are you looking to renovate and improve your home? A home improvement loan can help you do just that. This includes internal and external repairs, painting, construction of overhead water tank, electrical renovation, etc.
- Home extension loan – Make use of home extension loans to alter the current structure of your home and add new rooms. This loan can be used to increase the amount of built-up space at your home.
Additional Read: What are the current home loan interest rates?
Factors affecting housing loan eligibility
1. CIBIL score
CIBIL or credit score is typically used to determine your creditworthiness. A lender can get a proper understanding of your repayment capacity and offer you an appropriate interest rate. If you’ve got a low score, you’ll naturally have lower loan eligibility and vice versa. So, make sure you have a credit score of 750 or above.
2. Debt-to-income ratio
If your debt is eating up a chunk of your monthly income, you’ll automatically become a high-risk borrower. Having a low debt-to-income ratio, on the other hand, will increase your chances of obtaining the loan. It can also help you get a lower rate of interest.
A steady source of income and a secure job can convince the lender of your loan repayment capacity. Your loan eligibility willalso depend upon your monthly income. The higher the income, the higher are the chances of loan approval.
Now that you know all about home loans,you can approach a financial institution confidently!
Additional Read: What Are the Benefits of Pre Approved Home Loans?
To sum up
With minimal paperwork and instant disbursal, Tata Capital can ensure that you have a comfortable borrowing experience. With our housing loan interest rates starting from just 6.70% and easy repayment options, you can comfortably finance your new abode.
So, wait no longer! Use our home loan EMI calculator to understand your loan liabilities and start your loan journey today.