गृह ऋण पात्रता – आरम्भिक मार्गदर्शिका

Home Loan Eligibility Guide for Beginners

Buying a house in today's real estate market may seem expensive, but it is not impossible. With Bank of Baroda's Home Loans, you can buy a ready-to-move-in home, an under-construction home or a plot of land and construct house within 36 months. You can even construct a house on any piece of land you own. The bank also provides the necessary finance to renovate your existing property. However, your loan is sanctioned only if you fit the bank's Home Loan eligibility criteria. Let's understand what is Home Loan eligibility, and the various criteria considered by the bank.

What is Home Loan Eligibility?

Home Loan eligibility is nothing but an assessment of your loan repayment capacity. To assess whether you can afford and then repay the loan in a timely fashion, the bank considers several factors. These include your age, your income, your credit scores, the type of loan you are applying for, among others. Based on these factors, the bank determines the maximum loan amount you can get. Some factors also help you procure a lower interest rate on your Home Loan. Let's take a look at each of these criteria individually.

• Home loan eligibility for takeover loan/balance transfer: Home loan eligibility for takeover loan/balance transfer is for both resident and non-resident Indians for getting better deals from a new lender. The age limit of the borrower should be between 18-70 years, can be salaried or self-employed. Ensure that you submit the right documents for meeting the eligibility criteria for home loan balance transfer.
• Home loan eligibility for Pre approved home loan: Eligibility for pre-approved home loan includes a good credit profile, applicant’s income, type of employment, employer’s profile, the mention of a specified timeframe, outstanding loans that the borrower may be paying.
• Home loan eligibility for home renovation loan: Eligibility for a home renovation loan from Bank of Baroda is applicable for both resident and non-resident Indians. The age limit should be between 21-70 years, can be salaried or self-employed. The credit score should be 701 or more. All important documents must be furnished.
• Home loan eligibility for NRI: For Home loan eligibility for NRI, the person can be an Indian passport holder, person of Indian origin (PIOs) holding a foreign passport or can be an Overseas Citizens of India (OCI). Age limit should be between 21 - 70 years. Should have a permanent job/self-employed abroad for a minimum of 2 years with minimum annual income of Rs. 5 lakhs.
• Home loan eligibility for top-up loan: For home loan eligibility for top-up loan the borrower should maintain good loan repayment track record. They should meet the appropriate age limit and maintain a healthy credit report.

Home Loan Eligibility Criteria Based on Salary/Income

Your salary is the first criterion on which the bank assesses your Housing Loan eligibility. You should be able to provide valid proof of your income to eligible for this loan. You could be a salaried employee, a self-employed professional or a business/practice owner such as a lawyer, doctor, chartered accountant, etc. Essentially, it would help if you had a regular income to be eligible for a Bank of Baroda Home Loan. What's more, you can apply for the loan jointly with another immediate family member (check with the bank for eligible joint holders), who is also stably and securely employed, to improve your eligibility.

The bank typically has a standard interest rate and loan amount allowance based on your income bracket. The interest rate is linked to the Baroda Repo Linked Lending Rate or BRLLR and varies as per your credit score. [For instance, if your net monthly income is Rs. 25,000 and you can produce credit scores exceeding 750 points, you may be eligible for a maximum loan amount of Rs. 15 lakh at interest rates starting at 6.85% p.a*. On the other hand, if you have good credit scores and your net monthly income is Rs. 75,000, you can get a maximum loan amount exceeding Rs. 57 lakh.] You may repay the loan in tenures lasting up to 30 years.

You can use the Bank of Baroda Home Loan eligibility calculator to check the maximum loan amount you can get based on your salary.

Home Loan Eligibility Criteria - Self Employed individuals

Home Loan Eligibility Criteria for self-employed individuals is offered to an Indian national with a minimum of 2 years of business continuity. Age limit must be between 21-65 years, CIBIL score should be 701 or higher, loan-to-value ratio should be 75-90%.

Home Loan Eligibility Based on Age

Your age is another crucial Housing Loan eligibility factor that banks consider. Typically, the bank requires you to be at least 21 years of age to apply for the loan. Also, your age at the time of final EMI repayment should not exceed 65 years. Your chances of getting a Home Loan sanctioned are higher when you are younger; typically in your twenties or thirties. This is because, in this age group, you would have established your career securely, and you would have the capability to repay a high-value, long-tenured loan like a Home Loan. Furthermore, when you apply for a loan in your twenties or thirties, you still have several years of gainful employment ahead of you. You would be drawing a monthly income, which helps you repay your EMIs on time.

When you apply for a loan in your 40s, you may be able to make a higher down payment or pay a higher EMI amount. You need to assess what works best for you and then apply for the loan accordingly.

Other Factors determining Home Loan Eligibility

Apart from your salary and age, several other Home Loan eligibility criteria that the bank evaluates while considering your home loan application. They are as under:

• The Number of Years You've Been Employed

Being employed for over three years with the same employer conveys to the bank that you are stably employed.

• The Details of Your Employment

Typically, the bank consults your employer to assess your claim of employment. It also asks you to provide documents such as your offer letter, monthly income statements and salary slips, etc., to determine your eligibility. These documents help the bank evaluate your employer's reputation and decide the loan amount and interest rate you can get.

• Your Credit Scores and Financial Management

Your credits score is perhaps the most crucial of all Home Loan eligibility criteria. It is nothing but an assessment of your financial behaviour and your creditworthiness. Your credit score helps the bank evaluate how you spend your money and your income-to-credit ratio, i.e., how often you use your credit card and whether you repay your credit card bills on time, whether you are repaying your other existing loans regularly. It would help if you typically had a credit score of over 775 points out of a possible 900 points to get a low-interest Home Loan. The bank may also sanction your loan request if your credit score is in the 701-774range, but you may be charged a higher interest.**

• The Value of the Property You Intend to Buy and the Loan-to-Value Ratio

While the bank finances a significant portion of the value of the property you want to buy, you have to provide a down payment. Typically, you have to provide at least 10% of the property's value as down payment, and the bank finances the remaining 90 per cent. This is known as the Loan-to-Value ratio. With Bank of Baroda, you can get finance of up to 90% for Home Loans up to Rs. 30 lakh. You can get up to 80% finance for loans in the Rs. 30 lakh to Rs. 75 lakh range. If you need a loan exceeding Rs. 75 lakh, you have to pay a down payment of up to 25% of the property's market value and can get loans up to 75% of the value of the property.

Tips to Enhance Your Home Loan Eligibility

While you cannot change the bank's Home Loan eligibility criteria, there are several ways in which you can enhance your Housing Loan eligibility. They are as under:

• Repay Any Existing Loans You May Have

Your credit scores are reduced if you have any existing loans while you apply for another. As such, it is better to repay your current loans and then apply for a fresh Home Loan. Repaying existing loans demonstrates to the bank that you had taken on and repaid loans in the past and makes you a credit-worthy applicant.

• Apply Jointly With A Co-Applicant

When you apply for a Home Loan jointly with a co-applicant, the bank considers both your incomes. It also checks the credit scores and repayment behaviour of both applicants jointly. If both of you have credit scores exceeding 701 points, your eligibility will be enhanced, and you can even get low-interest loans if credit score is further higher.

• Opt For A Longer Tenure Home Loan

Your Home Loan eligibility increases with a higher loan tenure. A higher tenure allows you to repay the loan in smaller EMIs. It also ensures the bank that you would be employed for a longer duration, enabling you to pay your EMIs on time.

How is Home loan Eligibility Calculated?

Now you can calculate your Housing Loan eligibility even before you apply for the loan. You can use an online Home Loan eligibility calculator, available on the Bank of Baroda website. Enter details such as your age, income, monthly expenses, other loans EMIs, and the value of the property you intend to buy. Once you submit these details and click on enter, the calculator computes the maximum loan amount you can get. You can apply for a Home Loan online.

So, visit the Bank of Baroda website to check if you are eligible for a Home Loan. Apply for your Home Loan online and start the process of becoming a property owner!

*Subject to change at Bank of Baroda's discretion.

**Conditions apply