Having a home or owning a piece of land or property is a dream for every individual and that is where the home loans come as a great aid. There are many types of home loans being offered and the applicants can select the suitable ones.
The different types of home loans include:
1. Home Purchase loans- Loans for purchasing a new home.
2. Home Improvement Loans- Loans for repairs and/or renovations of already purchased home.
3. Home Construction Loans- Loans for construction of a new home.
4. Home Extension Loans- Loans for expansion or extension of existing home.
5. Home Conversion Loans- Loans for those who already have a home but wish to move to another one, both being financed by loans. Conversion loan transfers the existing loan to the new loan with the elimination of pre-payment of the former.
6. Land Purchase Loans- Loans for purchase of lands for both construction and investment purpose.
7. Bridge Loans- Loans for those who wish to sell the existing home and buy a new one. The loan finances the new home till a buyer is found for the home.
Getting approved for a home loan isn’t easy and requires planning and knowledge of how the application would be evaluated so that you can ensure that you meet all the criteria. Banks or housing finance institutions consider a number of factors while assessing the eligibility to get a home loan. Some of the most basic criteria for qualifying for a home loan are:
1. The minimum age of the applicant should be 21 years.
2. Maximum age to get home loan for salaried people is 58 and 60 for the self-employed people. This is however variable for different institutions.
3. The applicant should have a reliable and solid source of income.
Apart from these, the conditions required to qualify for a home loan fall under three approval categories- personal profile, credit profile and the property wished to acquire.
Personal Profile- This includes the stability of the borrower’s income, income and expenditure statements, asset and liability statements, age and collateral and securities.
Credit Profile- The borrower’s income forms a major lending criterion since it decides the ability to make home loan repayments. The borrower’s employment history, tax returns and proof of continued employment from the current employer in writing are the other things that would be required. Additional financial commitments may reduce the size of the loan.
Property- The value of the property will be assessed by the lenders to verify that it provides enough security to support the loan. The financial statements of the property including the rates and tax papers of the property would be checked for updates.
The planning for a successful home loan application is crucial and should also involve consulting a mortgage originator.
