We all have dreams and aspirations and make them into reality. But for that to happen a lot of investment and funds are required. Waiting for funds can take a lot of time, so the better option is to opt for a mortgage loan.
An unsecured loan of availing funds by keeping your asset as collateral is known as a mortgage loan. It is usually sanctioned against an immovable asset like a house or a commercial property. The lender keeps the asset as collateral until the borrower repays the total loan amount.
The application filling process for a mortgage loan is similar to that of any other form of a loan. You can either apply through the lender’s app or website or visit the lender in person to submit your details and provide the relevant documents for verification. While getting a mortgage loan is easy, there are various criteria that one has to fulfil to get the loan sanctioned. Let us see what these criteria are and how borrowers can qualify for a mortgage loan.
Eligibility criteria for a mortgage loan:
- Age limit: For self-employed individuals, the age should be between 21 to 60 years, whereas for salaried individuals the age should be between 25 to 65 years.
- The individual must be a resident citizen of India.
- The credit score should be 700+ for all individuals applying for a mortgage loan.
- The documents required for the verification are:
- Income Tax Returns for the latest two years
- KYC Documents
- Form 16
- Bank statements for the last six months and salary slips
- Documentation about the property offered as collateral.
These are some general eligibility criteria followed by lenders, based on your loan amount and the lender you choose the criteria can also vary.
Fullerton India calculates the repayment potential for each candidate before sanctioning the loan amount, this is done through various factors like income, your net monthly obligations, location, CIBIL score, qualifications/job profile, etc. The loan amount also depends on the valuation of the property being pledged, its age, location, and other factors.
How to Qualify for a Mortgage Loan?
While most of the criteria are not the ones that you can work on, some basic things that can be taken care of to qualify for the mortgage loan are:
- Work on your CIBIL score: Before you apply for the loan, make sure to work on your CIBIL score. A good CIBIL score makes it easier for you to qualify for the loan. While there is no strict demarcation of the loan, but a score over 700 is considered good. For this make sure that you are repaying your credit card amount on time, not maxing out your credit card limit, and ensuring a good credit history. The credit history makes your loan process quicker and also helps get a better rate of interest on your loan amount.
- Property details: Both residential, as well as commercial property, can be used as a mortgage. However, it is the type of property that will you get a good loan amount. The various factors on which the property is judged are the age of a property, location, assets, etc., and then the estimate of its value. These factors not only affect the loan amount, but also the rate of interest.
- Debt to Income Ratio: After the application form is filled, documents uploaded and the loan approved, the lender looks at the debt-to-income ratio of the applicant to determine the loan amount that needs to be sanctioned. This is the ratio of income generated by an individual to his or her overall debt repayment expense.
- Work history: If you are a working professional then your work history also helps in qualifying you for a mortgage loan. A longer and more consistent history develops a sense of trust in the borrower thus one is more likely to get the loan approved at better loan terms.
- Employer: Apart from your income, your work history the employer also generates a sense of trust. A government employee or an employee of a reputed private organization is more likely to get the loan sanctioned with much ease. Even the loan terms like tenure and interest rate offered are more lenient and better than being offered to others.
- Relations with the lender: Always ensure to opt for a loan from an organization that you have good relations with. This will help you in negotiating for better terms and conditions for your mortgage loan.
The above are some factors that are considered by lenders that allow for convenient eligibility and easy mortgage loan process for hassle-free customer experience.
Knowing these vital factors will help you in planning for the mortgage loan beforehand to ensure ease and simplicity when applying for the same. The customers can plan and qualify for all the requirements. The financial institutions provide simple loans against the property process to ensure customer convenience.