What you should know about Home loan against Property?

Loan against a property is provided when you are looking forward to invest in real estate. Home loan is provided at a certain percentage based on the market value of your existing property. Ideally the percentage falls between 40% - 60%.

It is not a hard and fast rule that you have to buy a home against a home loan for a property. There are companies and banks that provide personal loan. But, if you are unaware then loan interest is something which can make or break your deal. Personal loans offer higher interest rates and they vary between 16% - 21%. But taking home loan against a property means you will have to pay interest at the rate of close to 15%. These statistics may vary. But there is a huge difference for sure between these interest rates whatsoever. Though, the preferred option can be Home loan against property.

If you are applying for a loan against property through Bank, below is the process involved in its application:
•    If your property has owners more than one, then it is viable that you apply for the loan together.
•    Bank checks all the documents related to your property and verifies electricity, telephone and residence proof. Identity proof such as Pancard, Passport, Aadhar card or a Voter ID card have become a must submission at a bank. (Any one or any of the combinations are must submission for a loan at a bank).
•    Not just this, if you are employed or self-employed bank requires bank statement for the past 6 months and 2 years respectively.
•    The minimum age for borrowing a loan is 24 years and maximum is 60. For a self-employed individual the age limit is 65.

Bank reviews your credit limit by going through your timely payment track of other bills etc, before giving an OK for any Property loans. Based on the information collated, bank decides whether to give consideration to your loan or no.

The general rule for buying a property and for applying a loan request depends on solid reasons and assurance of your repayment for that loan. Hence, suggested; Do your study well. Get in touch with the bank or the financial company and be prepared with the documents asked for to avoid delay in the process of home loan for buying a new property.

What Income is taken into consideration when opting for a Home mortgage loan?

We all need a home of our own. Home is a one-time investment and real estate is the bank of profit if the property chosen by you now delivers enough money in the near future when you plan to sell it. But, coming back to the point, home loan is the best way to get closer to your dream of owning a home.

But as they promote, Home loan is not made available that easily to any investor. A good study of the investor and his income is just the beginning to the home mortgage loan process. So, here are lists of sources, variables etc. that will help you know if you are eligible for a loan.

•    For a regular salaried person, the lending partner i.e: Bank or finance companies, they would want to see the current pay stubs as well as tax forms for the past 2 years. If there has been a raise in salary or change in pay in any form, then you are required to get a statement from your boss confirming on the permanency of change.

•    You are also eligible to use special case income for eg: amount for overtime or commission etc. These will be income calculation for commercial property loans or home loan.  To prove about these additions in your income, it is important that you quantify the same with documents received for commission or overtime of last 2 years. It is also important that a written letter is given by the boss, that you will be expected to continue doing the same.

If the income your earn comes from another source beyond a company i.e a source for a part-time work or a side job, then it is important or mandatory to submit W2 forms for these too.