If not done right, the documentation stage of your home loan application process can become tedious and lengthy. Having a dossier of all your documents ready can substantially improve your borrowing journey – making it smoother and faster. And to the lenders’ credit – documentation asks these days are minimal and hassle-free. A documentation check’s function is to verify all the applicant’s claims to make the lender feel confident enough to sanction their desired loan amount, at a low home loan interest rate, without any qualms over the applicant’s financial health and repayment capacity.
When your goal is to avail of a home loan at a competitive interest rate, you should make sure that you have all the required documents in place and match up favourably against the lender’s eligibility parameters. Home loan interest rates are considerably lower, and the offers available to borrowers currently are compelling and lucrative, and by ensuring that your application touches all the bases that are important in a home loan borrowing journey – you maximise your chances of being approved for such home loan deals.
Bajaj Housing Finance Limited’s Home Loan, starting from just 6.65%* p.a. is one such deal. You also get the option of linking your home loan interest rate to an external benchmark, in this case – the RBI Repo Rate, as an industry-first initiative amongst HFCs, to give borrowers the power to decide what parameter guides their home loan interest rates.
If you have your financial affairs in order and keep your credit profile stable, availing of a profitable home loan will not be difficult. In this article, we detail what the typical home loan eligibility criteria look like and what documents an applicant must keep handy – to hasten the process of their home loan approval and disbursal.
What is Home Loan Eligibility?
Every lender enforces a basic set of eligibility parameters that help them weed out the good home loan applications from the riskier ones. A person's home loan eligibility showcases their ability to repay a loan, which depends on several factors, including their credit score, income, repayment history, age, etc. Other things that also affect your home loan eligibility is the loan to value ratio, and even the condition of the property which you are buying. Let’s look at some of the key eligibility parameters lenders seldom compromise on.
Applicant’s CIBIL Score
Your CIBIL score is the first thing the lender checks after receiving your home loan application. Your CIBIL score denotes your past payment history and accounts for their current repayment capacity, both of which are important information for lenders before they determine your home loan terms.
Bajaj Housing Finance Limited considers a score of 725 and above and is more likely to offer favourable terms to these score holders. We recommend you work towards enhancing your score if it’s lower than mandated. This could mean clearing off your previous debt obligations, sticking to a disciplined payment schedule and routine checks to ensure there are no discrepancies in your score.
Applicant’s Age
Age is another factor that plays a role in helping the lender decide what lending terms to offer an individual. Older applicants are a little more disadvantaged in this aspect, as the lender may consider 62 the maximum age, that too – at the time of loan maturity itself. This could result in higher interest rates, lower sanction amounts or a shorter repayment tenor. However, older individuals can still improve their chances of getting better home loan deals if they include a co-applicant with a good credit score or a guarantor in their application.
Another important factor in your application is your employment and income profile. Individuals with a stable source of income that meet the lender’s minimum income criteria, and the required amount of work experience in eligible offices and practices can enjoy competitive terms on their home loans.
Salaried individuals are expected to show at least 3 years of work experience in a public or a private-sector office or an MNC, whilst their professional counterparts such as Doctors and CAs must show a work history of at least 3 years in a registered facility or a practice.
Your employment profile works to your advantage in assuring your lender that you will less likely become a risky customer.
Now that you have a clear understanding of the factors that weigh on the status of your home loan, let us look at the documents that the lender will need, to complete the application process and sanction your loan amount.
To make it easier for you to compile these documents, we have divided them into categories.
Salary Slips: Salaried applicant must submit a 3 months’ salary slip as proof
Business Documents: Self-employed individuals must be able to show at least 5 years of business continuity
Taxation Documentation: Applicants must submit their latest ITR and in some cases, also submit their Form 16
**Applicants are to note that the documentation requirements are subject to change, at the discretion of the lender.
Other Documents
Property-related documents: Lenders will also want to see documents supporting the purchase of the property, for which the loan is being taken. This may include a registered sale deed, or a copy of the stamped sale agreement, or even a copy of the approved project plan.
NOCs: For applicants who are switching lenders by opting to transfer their home loan balance will also have to submit an NOC, a foreclosure letter, and a statement of account to their new lender.
If buying a house is in the pipeline for you, consider availing of a home loan from Bajaj Housing Finance. The HFC offers home loans at interest rates starting as low as 6.65%* p.a., for sums as high as Rs.5 Crore* or even higher, basis your eligibility. Further, its minimal document and eligibility requirements make it quite easy for applicants to get a home loan on favourable terms from them.
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