What are the Main Eligibility criteria for Home loans in banks?

One of the most commonly asked questions by borrowers is –What are the main eligibility criteria for housing loans in banks. Lenders look at many factors before deeming a borrower eligible for the loan.

• Credit Score: Commonly called in India as CIBIL score, it determines two factors – your personal loan eligibility and the interest rate levied on your home loan. Make sure, your CIBIL score is up to the mark. Paying your EMIs on time improves your credit score, as a result you get better loans in future.
• Current income: Typically, banks give loans to people who are most likely to pay back and that is decided by taking in account the current income of the borrower and his/her paying back capacity.
• Employment History: Lenders want to minimize their risk involved while dishing out loans to borrowers. This is why they always prefer people with better employment history. Lenders want to see that your line of employment is a stable one and that you have stayed in the same line of work for a long time.
• Equated Monthly Instalments (EMIs): Your EMI is the monthly instalment that you pay to return your loan. It includes a portion of principal, interest, taxes and other deductibles.

How banks decide eligibility for home loans?

Before sanctioning a housing loan, banks need to minimize the risk involved for them. Whether a person in eligible for a home loan or not is decided by the repaying power of the person, which in term is decided by taking the above explained factors.

The importance of CIBIL score

CIBIL score is the summary of a person’s credit history. CIBIL score determines the credibility of a borrower; it helps banks and other financial institutions evaluate a borrower and minimize the risk of defaulting. CIBIL score plays a very important part in India’s financial system and helps borrowers and lenders to secure quicker home loans in Delhi.

What is the CIBIL Score required to secure a home loan?

A CIBIL score of 750 and above is considered to be very good by most lenders.

What are the documents required for Home Loan?

For salaried employees

Hard and soft copy of passport size photo
• Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority
• Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority)
• Education Qualifications – Latest Degree
• Latest Salary-slips for 3 months
• Form 16 for last 2 years
• Last 6 months Bank Statements(salary account)

For self-employed/professionals

• Hard and soft copy of passport size photo
• Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority
• Residence Proof (Passport, Driving License, Telephone Bill, Ration Card, Election Card, Any other Certificate from Statutory Authority)
• Education Qualifications – Latest Degree
• Certificate & Proof of business existence along with Business Profile
• Last 3 years Income Tax returns (self and business) with Profit & Loss Account & Balance Sheets duly certified/audited by a Chartered Accountant
• Last 12 months Bank Account Statements (self & business)

Documents Required for Home Loan Application.

Documents	Salaried	Self-Employed
	Financial Last 3 month’s salary slip 6 months bank statement Form 16 of last 2 years	Financial Bank statement: Current account statement of last 1 year Savings account statement of last 6 months Business and residence ownership proof( Any registration Proof) Last 2 years ITR with computation of income
	Property: Title Deed of the property(existing or purchased) being mortgaged NOC from legal owners NOC from statutory authority e.g. Co-operative Housing Society Stamped and registered agreement of sale between previous owner and the borrower	Property: Title Deed of the property(existing or purchased) being mortgaged NOC from legal owners NOC from statutory authority e.g. Co-operative Housing Society Stamped and registered agreement of sale between previous owner and the borrower

	KYC: Pan Card Adhaar Card Voter Id Utility Bill

Eligibility
	Age 1. Minimum age of Applicant 24 years 2.Maximum age at loan Maturity 60 years Form 16 of last 2 years