What should everyone know about home loans?

What are home loans?

Home loans or housing loans are an important accessory for people looking forward to purchasing a new home, constructing a new home, renovating, etc. It helps borrowers to get funds beyond their savings and makes them able to get the best home possible. There are banks and housing loan companies that provide home loans at attractive interest rates. There are different types of housing loans and there are some important things to keep in mind while looking for or applying for a housing loan.

Types of home loans in India :

There are different types of home loans available in India and each type fulfills a specific task. These types are :

• Home Purchase Loan for purchasing a home if you don’t have sufficient funds.
• home Construction Loan is needed for constructing a new house.
• Home Improvement Loan for renovation purposes.
• Home Extension Loan for adding a new floor or room to the home.

Composite Loan, It is a combination of land and construction loans but the lender should be informed about the project in detail.

What are documents required?

The documents required to apply for a home loan are :

• Identity proof such as passport, Aadhar card, voter ID, Driver’s license, and PAN.
• An address like passport, electricity bill, bank statement, passbook.
• Property documents like a copy the of the original sale deed, NOC from the society if needed depending on your property, allotment/possession letter 
• Income proof depends on the nature of your source of income. Income tax returns, salary slips, etc. for the professionals, audited financial sheets for the self-employed applications. You also need a qualification certificate in some cases.

Reasons for rejection :

A home loan application is also rejected by lenders in many cases and this is due to the following reasons :

• When the documents are incomplete, The loan application is rejected.
• A Low CIBIL score is also a major reason behind the rejection. It portrays your past loan repayment record and plays a major role in the application process.
• Any previous unpaid loan also causes rejection in some cases.
• The lack of income or funds for the loan needed also leads to rejection.

What is the eligibility to apply for a home loan?

Any adult with a good source of income, appropriate collateral, a good CIBIL score, and verified documents can apply for a home loan. The application process is becoming swift and simple day by day.

When to apply for home loans?

When you have sufficient funds for the loan repayment, the collateral is worth the loan amount and there is the need for extra funds. You can apply for a home loan. Check all the available deals and the market and select the one which suits your requirements. 

Getting a home loan is an easy process nowadays and you are now aware of the things needed for getting a home loan without any complications. These funds will be very useful for you and they also provide tax benefits for the repayment of the principal and the interest rates of the loan.