A Complete Guide to Home Loan

02 Jan 2023

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What is a Home Loan?

  • For those looking to own a home, banks and other financial institutions offer loans for that purpose at competitive interest rates. So if you already have that dream house in sight, the next step isn't too hard.
  • You can use a Home Loanto buy a plot of land, a flat or an apartment, build your own home from the ground up, and even extend or renovate your existing residence.

Home Loan Application Process

If you wish to apply for a home loan from the Bank of Baroda, the home loan application process is user-friendly and can be done online by the eligible individual. Visit the Bank of Baroda website, fill the form as per the instructions, and furnish the required documents. The home loan is disbursed based on the clauses of the agreement and the construction stage of the property.

Different Types of Home Loans

Home loans have either fixed or floating rates of interest with a tenure extending up to 30 years. Different home loans available are Home Purchase Loan, Pre-Approved Home Loan, Home construction loan, Plot Loan, Top-Up Loan, Home Extension/Renovation Loan, Home Loan Balance Transfer.

Advantages of Home Loan

The advantages of home loans are many. Besides offering you security and a feeling of ownership, a home is a good investment. Property prices keep appreciating over time. It helps in tax benefits of up to 3.5 lakhs.

Eligibility for Home Loan

Eligibility for a home loan includes credit score of 701 and above, age should be within 21 - 70 years for maximum loan tenure of 30 years. In service candidates can apply after 1 working years, those in business, after 2 years of continued business. Loan repayment capacity should not exceed 50% of their total income. The home loan amount must not exceed 90% of the property value.

How to get Instant Home Loan?

Instant home loans or pre-approved home loans are credited to borrowers based on their creditworthiness. The loan amount is decided by the borrower and credited based on the previous repayment reputation. Maintaining sufficient account balance makes you eligible for an instant home loan. The borrower must fill the application and furnish necessary documents.

Home Loan Documents

Home loan documents required for salaried and self-employed individuals applying for a home loan, include copy of the application form, identity proof, address proof, last three months’ salary slip, copy of last three years of Form 16, bank statement for last six months reflecting deposited salary and current repayments. Proof of ownership papers.

Ideal CIBIL Score for Home Loan

CIBIL Score for Home Loan is a three-digit between 300 and 900. The higher the score, the greater the chances of a home loan. The Bank of Baroda requires a minimum credit score of 701 for a customer to be eligible for a home loan.

Home Loan Interest Rates

Home loan interest rate is the amount charged by the lender on the principal sum from the borrower. The interest rate determines the monthly payable EMI against the home loan. Bank of Baroda Home Loan Interest Rates 2022 for salaried 8.85%-10.20% p.a. and non-salaried 8.95%-10.30% p.a. up to a tenure of 30 years. The loan amount is up to 20 crores.

Also Read - Fixed Vs Floating Home Loan Interest Rate - Which is Better?

How is Home Loan EMI Calculated?

The most common query of borrowers of home loans is How is Home Loan EMI Calculated?

A home loan can be calculated by a three-way process of the home loan EMI calculation formula. A simple mathematical formula. You can calculate by just fixing the numbers in the formula to get the right sum, calculate by using an Excel sheet, Online EMI calculators.

Home Loans Prepayment

Home Loan Prepayment is a facility for borrowers who can prepay the house loan in parts or the full amount much ahead of the date of completion. Customers who choose to make a home loan prepayment are owners of surplus funds.

Tenure for Home Loan

Tenure for Home Loan is the total duration in which the loan must be repaid to the lender or the bank. The loan EMI payment is spread over 30 years, which is the maximum tenure. An individual’s maximum tenure is dependent on their retirement age, along with other factors that determine the tenure period.

FAQ

Questions to Ask When Applying for a Home Loan

Here are some of the common questions applicants ask when they apply for a Home Loan:

What is the maximum duration/period for which I can get the loan?

Bank of Baroda grants a Home Loan for a maximum tenure of 30 years. The loan term will under no circumstances exceed the age of retirement or completion of 65 years of age, whichever is earlier. The housing loan tenure also varies based on the loan amount and the income of the borrower.

Can I prepay the loan ahead of schedule?

Yes, you have the option to prepay the loan either in part or in full.

Who is eligible to avail of a Home Loan from the Bank of Baroda?

All resident and non-resident Indians (NRIs) between the age of 21 and 60 are eligible for a Home Loan from the Bank of Baroda.

How much does the Bank of Baroda lend?

The Home Loan amount is determined based on your repayment capacity. Other factors like age, income, dependents, assets, liabilities, occupation stability, continuity of income, savings, etc., also play an essential role.

What is the mode of repayment?

You can repay your housing loan amount via Equated Monthly Installments (EMIs).

What is the security for the loan?

The security for the loan is the equitable mortgage of the property to be financed.

Conclusion:

A Home Loan helps you buy a house where raising funds appear challenging. Moreover, at Bank of Baroda, the application process is online and convenient where you can upload documents from the place of your convenience. You also can view all the types of Home Loans on the bank's website.

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