Wednesday, January 9, 2013

How Eligibility Calculators help in availing home loans?

Eligibility calculation is one of the important aspects of home loan processing. Banks calculate home loan eligibility of each and every customer who applied for a home loan by taking applicant and co-applicants income into consideration before giving a sanction letter to the customer. A little idea on how this eligibility is calculated will make much difference in the process of home loan.

The process of eligibility calculation varies from customer to customer depending on the income source. If the customer is a salaried customer then the sum of regular components of salary is taken into consideration along with 50% of the variable pay for the calculation of eligibility. If the co-applicant income is also considered then the same principle will be applicable to the co-applicant also. After arriving at a component both the applicant incomes is added and take a maximum of 60% of the salary for the contribution of home loan EMI. If any liabilities are there then the component of their EMI will be deducted from this amount and on the remaining amount the eligibility is calculated by dividing the amount with the per lace EMI component of the home loan interest rate charged for the desired tenure or applicable tenure which results the home loan eligibility.

The Eligibility process is the same for the NRI Salaried also the only difference is the amount is converted to Indian currency before calculating the eligibility. The calculation differs a bit for self employed whose gross income along with depreciation, Interest paid, and remunerations are considered for the calculation and remaining process is same. The calculated eligibility by the bank is final. Liabilities that a customer would like to close to avail a home loan will not be considered as a liability and liabilities below 6 months are also not considered. Having liabilities will decrease the loan eligibility and it is always suggestible to close all the liabilities before applying for a home loan for comfortable repayment of home loan.

Eligibility calculators help you to know how much amount you will be eligible for if you go for a housing loan depending on your requirement. The Eligibility calculators will take all the information about your income and your requirement's then give final eligibility depending on the values provided. The value arrived finally may vary from bank to bank depending on product and tenure considerations.


Saturday, January 5, 2013

Why construction loan is a best product?

Banks design different products for different needs of customers which are based on specific needs of ones requirement. It is believed that Construction loan is the product that suits best to the customers who are looking to avail loan on the property or vacant land to start construction. The property can be a constructed house on which developments are proposed or can be an open land. To avail the loan the customer’s needs to undergo a very simple process which will give the loan required by the customer?

The customer needs to avail all the required permissions from the concerned departments before applying a home loan. The required permissions are Plan of Construction from the municipal authorities and land regularization approvals if the land is not regularized or falls under Gram Panchayats. Once the approvals are availed a construction agreements is to be executed in favor of the Builder if the construction has been given on contract, if it’s a self construction then there is no need of any agreements just the property documents will suffice the requirements.

The customers need to submit all his Personal documents which proves his/her identity and provides information about the residential address and income documents which authenticate the monthly salary received from the employer and the form-16 which gives the details of the tax deducted by the employer from the customer’s salary.  

All the personal documents along with property documents on which the construction being done need to be submitted in the bank of which verifications are done and post satisfactory verification the loan will be disbursed. The property on which the construction is being done can be a registered property on customer’s name or his/her parents name. Customer by making his/her parents as co-applicant in the home loan application can avail the construction loan. Tax exemptions US 80© of Income Tax are applicable on the principal and interest components of the loan.

Customers are advised to check with the home loan interest rate conveyed to you at the time of applying a home loan with the interest rate mentioned on the sanction letter given by the bank before going for disbursement of loan amount.