Weigh­tage Al­lot­ted for Iden­ti­fied Vari­ables

Consumer Voice - - Bfsi -

El­i­gi­bil­ity In­come

Var­i­ous banks have their own meth­ods/stan­dards for cal­cu­lat­ing el­i­gi­bil­ity. You should do some re­search to check which bank is of­fer­ing you the higher loan. Cou­pling your spouse’s in­come may also be a good op­tion to in­crease your home loan el­i­gi­bil­ity.

Home loan el­i­gi­bil­ity de­pends upon var­i­ous fac­tors such as in­come (banks gen­er­ally keep the EMI-to-in­come ra­tio at 0.45 to 0.50); ten­ure of the loan (the longer ten­ure you opt for, the more is your home loan el­i­gi­bil­ity and the lesser will be your EMI); in­ter­est rate of­fered (if your in­ter­est rates are on the lower side, then the loan el­i­gi­bil­ity will be higher, and vice versa); and ex­ist­ing loans (in case you have any ex­ist­ing loan, the loan el­i­gi­bil­ity amount will come down to keep the EMI-to-in­come ra­tio around 0.50).

This is not per­ceived to be an im­por­tant or in­flu­en­tial vari­able and hence has been al­lot­ted no points. Fur­ther, the bor­rower can only in­crease his el­i­gi­ble in­come by club­bing that of his spouse/close rel­a­tives.

Age is of mi­nor rel­e­vance for the home loan as the In­dian male/fe­male be­comes gain­fully em­ployed only around 30 years of age. Most of the banks/HF com­pa­nies give loans to those whose age is more than 18. The max­i­mum age is around 70 years. There­fore, tak­ing this as a mi­nor vari­able, we have as­signed 5 points.

Max­i­mum Loan Amount

Banks/FIs of­fer three slabs of loan struc­ture – up to Rs 30–Rs 35 lakh, up to Rs 75 lakh, and above Rs75 lakh – de­pend­ing upon one’s el­i­gi­bil­ity in terms of in­come and the rate of in­ter­est of­fered to the prospec­tive bor­rower. As this is an in­flu­en­tial fac­tor, we have al­lot­ted 15 points for this vari­able.

Mar­gin (Bor­rower’s Stake)

This is one vari­able that of­ten con­fuses the con­sumers. Mar­gin is the amount or con­tri­bu­tion that is brought in by the prospec­tive bor­rower as proof of his stake in the business trans­ac­tion. It is noth­ing but his in­volve­ment in the in­vest­ment/loan process. Mar­gin money is also sought by the business/ gov­ern­ment ma­chin­ery to keep it as a hedge fund against any non-per­for­mance of any of the clauses in a con­tract/ten­der work. In view of its im­por­tance, we have as­signed 15 points.

Pro­cess­ing Charges

This is preva­lent with almost all the fi­nan­cial in­sti­tu­tions. It is a one-time charge levied by the fi­nancier to­wards the labour of pro­cess­ing the loan doc­u­ments, as a cost to be borne by the prospec­tive bor­rower even if in the fi­nal stages of the loan process the loan is not sanc­tioned by the fi­nancier. It also in­cludes doc­u­men­ta­tion charges, stamp duty, etc.

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