home loan eligibility Archives -

30 Jan

What is Home Loan Balance Transfer Process? | Finheal.com

Home Loan Balance Transfer involves the process of transferring existing Home Loan account to another bank or NBFC [Non-Banking Financial Institutions]. People usually go for the Balance Transfer when they come to know, if any other financial institution is offering a lower rate of interest and attractive loan which is easier on the pocket as well as repayment option that suit the needs. Read more »

02 Jan

Factors that have an affect on Home Loan Tenure

Home Loan Tenures | 10 Years, 20 Years, 30 Years

The home loan tenure and home loan amount are positively connected. So, higher the home loan tenure that you choose for higher is the home loan eligibility, subject to the smallest amount margin necessity relative to the value of the property. So, it makes sense for a borrower to opt for a longer tenure, so as to be able to have higher loan eligibility, as well as the flexibility to prepay it, in part or in full. Most home loans, by default, have a high tenure of 20 years and in some cases even up to 30 years. The tenure of a home loan depends on a variety of factors, which you should be conscious of, before you move toward the lender for your loan.

Age and source of income of the borrower Home loans are known, on the basis of a borrower’s ability to service it and this, in turn, is strong-minded by your income. As a result, the overall loan amount eligibility will depend on your age and the retirement age. For salaried individuals, 60 years are generally taken at the retirement age and thus, the maximum tenure of home loan you would get would be equivalent to the remaining years of service. In case you are self-employed, lenders are eager to treat 65 as the retirement age for professionals and businessmen. Thus, self-employed borrowers, by default, may have higher home loan eligibility. A person who is about to retire, is not usually eligible for a home loan, unless s/he is able to prove that they have another regular source of income.

Age of the property

The age of the building also plays a very significant part, in determining your home loan eligibility. As the house is pledged as a safety for the home loan, it is the only option that the lender has, in case of a default in servicing the home loan. As a result, the lender will not provide a home loan for a tenure that is longer than the remaining life of the property that you intend to buy.

The tenure of a home loan cannot be longer than the residual life of the property. In case a longer tenure than the residual life of the property is granted, the lender carries the risk of losing their safety, in case the property is destroyed or collapses. This is why lenders normally do not finance old and dilapidated properties. Leasehold properties In case the property is constructed on a leasehold land, the home loan tenure cannot be higher than the balance period of the lease, despite the fact that the property may be in good condition, as the lender would be reluctant to risk the possibility of the lease not being renewed. Such cases are uncommon, as land lease are typically approved for a fairly long period. However, this situation may happen for a property, if the lease period of the land is approaching its end.

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