Are you applying for a home loan online? If yes, then you may have dug deep and carefully checked every single criteria to verify your home loan eligibility. However, if you have been trifling with the property you’ve chosen, your housing loan application still faces the risk of being turned down.
Often overlooked, the property for which you take a home loan plays a crucial role in determining the loan amount you’re sanctioned and the interest rates charged. Additionally, the location and amenities of a chosen property also affect your home loan eligibility factors.
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How Does Your Property Affect Your Home Loan?
Your choice of a property affects your home loan in the following ways.
Buying a house that is larger in size will secure you a higher home loan amount and vice-versa. This naturally follows from the fact that size is one of the key determinants of property value in the real estate market.
Another important factor that lenders consider is the location of the property you have planned on purchasing. Buying a house in a prominent area of a metropolis will fetch you lower home loan rates as compared to one in the suburbs. Moreover, there are specific locations, especially in the outskirts of a city for which lenders don’t even extend home loans because they may not have clearances from local government bodies.
The age of your property is also a matter of paramount consideration for home loan lenders. It is recommended that you always choose a property that is not too old as home inspectors will examine its structural strength before sanctioning your housing loan.
Furthermore, a younger property is more likely to appreciate with passing time; the greater the worth of your property, the higher will be the loan amount granted to you and lower will be the home loan interest rates charged.
Condition of the property
The quality of your property’s construction and its present condition will have a lot of say in the sanctioning of your housing loan. Lenders conduct technical evaluation via home inspectors for structural damages and chances of property collapse. Besides the basic structure, they will also check the plumbing and electrical systems, garage and roof, even the working condition of interior appliances like the dishwasher.
It equally does good to know things that lie beyond the scope of home loan property inspection. Home inspectors will not be checking for sewer issues, pest or termite infestations, chimney condition, use of asbestos, etc. Poorly-maintained properties fail to enable their prospective buyers to meet home loan eligibility criteria.
Credibility of the builder
This one often goes unnoticed. The credibility and reputation of your property builder will not only help you secure home loan approval but even lower home loan interest rates. We all prefer to confide in those we can trust; similarly, lenders will see your property as a low-risk one when a renowned and reliable name backs it.
Carefully assess your property based on the factors mentioned above and don’t forget to use calculators such as the home loan eligibility calculator and home loan EMI calculator before you opt for a home loan.
To apply for your home loan online, choose India’s leading lending institution – Tata Capital. With us, enjoy high eligibility, low home loan interest rates, flexible EMI options, and hassle-free application processing.