Now with banks and financial institutions offering easy loan schemes it is easy to own your sweet home. If you already have one, then you can modify it into a cosy and comfortable one.
Home mortgage means pledging the vacant plot where you are going to build your home. Home mortgage loans are offered for a variety of purposes:
1. To build or modify your home.
2. For all general purposes – it can be for any purpose.
Usually interest rates are soft for home-building or modifying purposes in comparison with the rates for general purposes by using the property as security.
The loan can be designed as a term loan which has a fixed duration in which the loan has to be repaid with interest. Otherwise it can be availed as an overdraft with fixed and floating rate clauses.
Eligibility to avail home mortgage loans is as per other regular home or mortgage loans:
1. Age:- If you are between 18 and 45 years then you are eligible for loans up to 5 to 6 times your annual income. If you are over 45 years of age then you can avail up to 4 times your annual income. This would be the upper limit of loan that will be available to you.
2. NMI-EMI ratio:- After determining your maximum eligibility this NMI-EMI ratio is used to check your real loan availability. NMI means Net Monthly Income which is nothing but your Take Home Pay net of all statutory and other tax liabilities plus monthly repayment commitments of all other loans availed like car loans, personal loans, credit card payments etc. Now the EMI payable for your proposed loan is reckoned. Most banks/FIs will see that your NMI as arrived above will be at least twice that of the EMI of your loan. In other words, the EMI/NMI ratio should be at most 0.5, so that you have adequate or at least 50% of your NMI for your home/family expenses. Some exceptions are, however, available if you are a HNI (High Net-Worth Individual) and your credit score/past credit history is good.
3. Property Value:- The value of the property that you are going to buy is another yardstick to qualify your loan eligibility. Banks/FIs do not want to finance more than 75% of the property to be bought to ensure your stake in the property. This is also subject to exceptions in the case of very high value property and for HNIs.
4. If you are married and your spouse has income and is willing to guarantee, then you become more eligible as your spouse's income gets added to your NMI.
If you want to know about what must be done to get a home loan and here to get it, visit Home Loan and to know about other types of loans that can be considered, especially mortgage loans, visit Mortgage Loan
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