How to Get a Home Loan to Build your Own Home?

First-time home buyers can apply for cost-effective financial solutions like home loans and effectively meet their housing finance needs. The home loan process is easy to follow and complete once an individual fulfils the eligibility requirements. Housing loan eligibility varies across lending institutions. Moreover, such institutions offer attractive deals like lower interest rates based on the Reserve Bank of India’s repo rates. So, individuals planning to build their own house and wondering how to get home loan should consider following the pointers mentioned below. 

How can an individual get home loans?

A housing loan application process is convenient and takes much less turnaround time to complete. In this regard, reputed lenders in India offer online housing loans. 

One should follow these steps to easily get a home loan in India:

Step 1: Potential borrowers must visit their lender’s official website and click “apply online.”

Step 2: They need to enter basic personal details like name, phone number etc. 

Step 3: After entering these details, they will receive an OTP on the registered mobile number. 

Step 4: Then, they must choose the loan amount and tenor. 

Step 5: Finally, applicants need to enter employment, financial and property details. 

After completing these steps, a representative will get in touch with them for the next steps. 

While planning to apply for a housing loan, one can consider reputed lenders as they offer a high-quantum loan at a competitive home loan interest rate. 

Additionally, some lending institutions provide pre-approved offers for a quick and hassle-free application process. These offers are available on various products including home loans and loans against property. Borrowers can check their pre-approved offer by submitting basic details like name and phone number. 

Besides knowing how to get a home loan, one should know the eligibility requirements based on the lenders. 

Home loan eligibility criteria

After meeting their eligibility criteria, one can easily avail of home loans from renowned lending institutions. Generally, any Indian citizen with a good financial profile can obtain this loan. However, there are certain criteria that vary across borrowers. For instance, some requirements are different for salaried and self-employed individuals.

Here is a comprehensive list of eligibility factors one should consider before securing a loan:

  • Age: Salaried individuals between 23 and 63 years of age can apply for a home loan. In addition, self-employed people aged between 25 to 70 years are eligible for this financial product. 
  • Work Experience: In terms of work experience, salaried applicants possessing 3 years of experience can consider this option. However, self-employed individuals should have a business continuity for some years for housing loan eligibility. 
  • Monthly Income: The minimum monthly income necessary for a housing loan application depends on a salaried or self-employed personnel’s residence city and age. 

Other than this, several other factors affect a borrower’s eligibility. Before knowing how to get a home loan, one should be aware of certain pointers like:

  • Existing obligations
  • Credit score
  • Additional sources of income etc. 

Documents necessary during a housing loan application

Potential buyers should keep the following documents handy while filling out an online application form for a housing loan:

  • KYC documents like Aadhaar, PAN, Voter ID etc. 
  • Last 3 months’ salary slips
  • Income proof
  • Bank account statements for the last 6 months
  • Property documents

While processing a housing loan, some additional documents might be necessary. 

Further, one should keep some important clauses of the home loan agreement in mind to avoid any future hassle. Such clauses include:

  • Reset and Force Majeure clause: Borrowers can choose a fixed or floating interest rate while applying for a housing loan. Before signing up for a loan at a fixed interest rate, one must check this clause as lenders can change the fixed interest rate due to exceptional circumstances. 

Note: Applicants need to repay their loan by paying EMIs based on the aforementioned interest rates. They can calculate these monthly instalments by using a home loan EMI calculator

  • Prepayment and Foreclosure clause: Some lenders might offer a prepayment and foreclosure option on a housing loan. Hence, one should consider going through the prepayment and foreclosure terms carefully before signing a loan deal with a lender. 

Nevertheless, if borrowers are unhappy with their current loan deal, they have an option to opt for a home loan balance transfer. 

To conclude, knowing how to get a home loan before purchasing a property is crucial for a seamless transaction. In this regard, one can refer to the aforementioned section and apply for loans effortlessly. 

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