Housing finance companies look at your monthly salary and your age to determine loan eligibility.
By Vishal Ghadigaonkar
For home loans, housing finance companies calculate the eligibility of salaried person based on salary slip for the last six months, bank statement where salary is credited, Form 16 for last two years and 26 AS statement for two years, PAN card for identity proof, address proof like Aadhaar card, passport and details of existing loans taken and its repayment.
Take last six-month average salary income based on salary slips and deduct the existing obligation. Housing finance companies also consider the impact of number of family members dependent on home loan applicant. The Monthly Loan Servicing Charges (MLSC)—the monthly income that must be spared by the borrower towards the housing loan repayment—is generally 65% and the rest will be to meet household expenses. Some housing finance companies may consider MLSC of 50%.
The golden rule
The home loan eligibility of the person will increase if his age is below 30 years. The maximum tenure given by housing finance companies is 30 years for salaried employee. So, if your age is 30 years then in such case you will get tenure till the age of retirement which is generally 58 years and you will get tenure of 28 years only. Further due to maximum tenure of home loan, the monthly EMI burden is also reduced to the maximum extent.
The writer is chartered accountant
Source: Tax Guru