how to apply for a home loan? what are the documents required?
a home loan can help most of us realize our dream of owning a house. the home loan application process has become much easier now and applicants can choose to submit their home loan application online or offline depending on their preference. you just need to know the right process and keep handy the list of documents required to apply for a home loan. if you are planning to apply for a home loan, then read below to get all the information required to get your home loan approved without any hassles:
home loan eligibility
once you have finalized the house you want to buy or the amount required to renovate the house, you need to check how much loan you can get depending on your eligibility. the home loan eligibility criteria may vary from lender to lender, however, some of the most common points taken into consideration by lenders for home loan approval include:
1. age of the applicant
the age of the applicant is an important factor checked by the lenders when they sanction a home loan. since home loans are offered for up to 30 years, younger people with a longer work tenure ahead of them have a greater chance of getting a home loan approved. if the applicant is nearing retirement, the lender will give a loan for a short tenure which can result in a higher interest rate as well as higher EMI.
2. financial status
your debt-to-income ratio matters a lot when you apply for a home loan. the lenders check your income flow and expenditure to assess your ability to repay the loan. it helps weed out high-risk candidates who are likely to default on EMI payments if the loan is approved.
3. credit score and payment history
a high credit score and a good track record of debt repayment are beneficial to your home loan application. this assures the lender of your creditworthiness and projects that you are a responsible borrower. individuals with high credit scores also have a higher chance of securing a home loan at a low-interest rate and faster loan approvals. a credit score of 750 and above is considered good for loan approvals.
check your credit score for free on CRED
if you are not sure about your home loan eligibility, you can use an online home loan calculator. to get a clear overview of your home loan approval chances and your ability to repay them. you can use the CRED home loan calculator to get an accurate picture of what you are liable to pay as the total interest and EMI on your home loan.
with a clear picture of your financial liabilities, you can plan your home loan EMI payments in a way that is comfortable and convenient to you.
how to use the CRED home loan EMI calculator?
the CRED home loan EMI calculator has three variables - principal amount, interest rate, and tenure. all you have to do is input the principal loan amount, rate of interest at which the bank is offering the loan, and tenure of the loan in years format. the CRED home loan calculator will instantly show you the monthly EMI amount along with the interest payable and overall cost of the loan during the set tenure. you can change the CRED home loan calculator variables to see how best you can manage your home loan.
use CRED home loan calculator
documents required for home loan application
here are some of the basic documents required to apply for a home loan:
- a duly-filled home loan application form.
- passport size photographs of applicant and co-applicant (if any).
- identity proof such as a PAN card, Aadhaar card, voter ID card, driving license, or passport.
- proof of age such as a PAN card, Aadhaar card, passport, birth certificate, bank passbook, or driving license.
- residence proof such as bank passbook, voter ID card, ration card, passport, telephone bill, electricity bill, water bill, gas bill, LIC policy receipt.
- income proof such as last 3 months salary slips, ITR receipt of last 2 years, bank account statement of last 6 months for salaried individuals. those who are self-employed need to submit bank account statements for the last 6 months, profit and loss statements, and ITR.
apart from the above-mentioned documents, you also need to submit property documents for your home loan application
- a registered sale deed, allotment letter, or original copy of a stamped agreement of sale with the builder.
- a copy of the builder-buyer agreement
- a copy of the approved project plan/map
- a certificate of occupancy if your apartment is ready to move in
- receipts of property tax payments
- an approved copy of the building plan
note that this is only an indicative list, hence, you need to get in touch with your lender to find more details before you apply for the home loan.
how to apply for a home loan?
you can apply for a home loan online by visiting the official website of the preferred lender. you need to click on the home loan application link and fill in your details and submit it online so that the lender can contact you for further details. your lender will give you all the details related to the home loan interest rate, tenure, eligibility, documents required, etc. you can submit your application online or visit the bank branch or lender's office to submit the documents offline. the lender will take a few days to review your documents and cross-check your creditworthiness to estimate your loan eligibility. if you are eligible, the loan amount will be credited to your bank account.