Rightly said, ‘home is where the heart is’. We all aspire to someday buy our own home but it is no easy feat. Real estate costs have shot the skies and purchasing a new home involves a huge amount of money. As a self-employed individual, you may also be concerned about your housing loan eligibility. However, you can get one with just as much ease as those with a salaried income.
Here are some things that you must keep a note of when availing of a home loan:
Are you eligible?
As being self-employed, you are eligible to apply for a home loan individually or as a joint applicant. Some of the factors that are closely evaluated by the lender when checking eligibility include:
Repayment capacity – The lender must be convinced of your income and the capacity to repay the credited amount. As an effect, you will have to generate IT returns and the balance sheets of the business. Most banks require you to present these documents for a minimum of the past three consecutive years.
Personal profile – There are personal parameters that you must meet as an applicant. As a self-employed individual, you should be in the age bracket of 18 to 65 years to avail the loan. Education qualifications is another aspect that a lot of banks consider closely. Lastly, the number of dependents on the applicant is a factor that is closely evaluated. Banks work on the assumption that the higher the number of dependents, the lower your disposable income.
Financial capital – The current financial position is closely assessed to understand if you will be able to make the repayment. Lenders source history of debts, date on current debts, credit card scores, personal loans and more.
Stability of your business – This is the most crucial factor that helps the lender with knowing if you will be able to make timely payments. The profitability of your business, coupled with its stability to generate revenue over time is something that your lender will be most concerned with. For this reason, you must update your accounting books and tax returns.
Essential Home Loan Documentation
When applying for the home loan, some document requirements include passport size photographs, authorized government identity proofs, residential proof, income proof, business license and documents related to the property that you wish to purchase.
Thanks to the several financial institutions offering home loans for self-employed, you too can make your dream of owning a home come alive. Ensure that you meet the requisites and you will be able to smoothly get a home loan specifically tailored for you.
Hey, I am Raj. I am the owner and content publisher at Financenize. I have completed my education till intermediate school and after that turn to a full-time blogger and content writer. I usually share the quality information for the readers in Financenize, which helps the small business, individuals and entrepreneurs and the information I share makes their task more manageable. I am expert in analyzing the current situation and deliver a profitable period to the extent. You can find me on various social media handles online.