A home loan, also known as a mortgage, is a financial arrangement where a lender provides funds to an individual or entity to purchase or refinance a residential property. The borrower then repays the loan over time, typically with interest, in regular installments. The property serves as collateral for the loan, and if the borrower fails to repay, the lender may take possession of the property through a legal process known as foreclosure.
Features of Home Loan:
Loan Amount: Varies based on the property value and the borrower's eligibility.
Interest Rates: Fixed or floating rates may apply.
Repayment Period: Typically spans several years, allowing borrowers to repay in equated monthly installments (EMIs).
Tax Benefits: Borrowers may qualify for tax deductions on principal and interest repayments.
Benefits:
Homeownership: Enables individuals to own a property without making an upfront full payment.
Tax Advantages: Offers tax benefits under sections like 80C and 24(b) of the Income Tax Act.
Flexible Repayment: Various repayment options and loan tenures are available.
Eligibility Criteria:
Age: Typically, individuals between 18 and 70 years old are eligible.
Income: Regular source of income is required.
Credit Score: A good credit history enhances eligibility.
Property: The property being financed should meet the lender's criteria.
Documents Required:
KYC Documents: Proof of identity, address, and photographs.
Income Proof: Salary slips, income tax returns, or business income documents.
Property Documents: Sale deed, title deed, and other property-related papers.
Employment/Business Proof: Employment letter, business continuity proof, etc.
Bank Statements: Personal and, if applicable, business bank statements.
Keep in mind that specific requirements may vary among lenders, and it's advisable to check with the chosen financial institution for precise details based on their policies.