Home loan is one of the best way to streamline your process of financing your dream home. The excellent interest rates and customer service of banks and housing finance companies will make the entire process hassle-free.
Purchasing a house of their dreams is what everyone wants. You work long hours and do double shifts so that you can save enough to initiate the proceedings towards buying your dream home. However, the biggest hurdle in realizing their dreams is the huge financial requirements to secure the purchase of a house. Once you get that perfect house with a great balcony and the perfect bedroom, you realize that it’s going to put a huge dent in your pocket. There are also some other expenses apart from the face value of the property which starts coming up as soon as you start the process of purchasing your home.
Home loan apply online is one of the best way to streamline your process of financing your dream home. The excellent interest rates and customer service of banks and housing finance companies will make the entire process hassle-free.
Before we get into the discussion about the affordability of a home loan, we must get some facts straight.
Your Gross Income is not your Net Income
The in-hand salary that you take back home after tax and other deductions is a better indicator of how much you can afford to take as a home loan. Banks and housing finance companies do not consider gross income while calculating your ability to repay the home loan.
Your Willingness to pay does not convert into your Ability to pay
Banks and housing finance companies generally do not give a loan more an amount for which the EMIs exceed 30-40% of your monthly salary.
EMIs that you can afford
As mentioned above, banks and financial institutions make sure that EMIs on your loan don’t exceed 40-45 percent of your net salary.
For example, if your monthly take-home salary is Rs 1 lakh. So, banks will only lend you an amount for which EMIs are not more than Rs 40,000-45,000 per month.
Various housing finance companies like PNB Housing Finance company offer home loans at attractive interest rates. The PNB housing finance home loan interest rate is better then others.
Following are some of the approximate amounts of loan that you can get considering the INR 40,000 EMI that we talked about in the example given above (the interest rate considered is 8.5%:
· 30-year loan: Rs 52-53 lakh
· 25-year loan: Rs 49-50 lakh
· 20-year loan: Rs 46-47 lakh
· 15-year loan: Rs 40-41 lakh
However, this rule of EMI being less than 40% of your net salary is subject to certain factors. The biggest factor that the banks take into consideration is your pattern of saving and expenses. If at the end of the month your account does not have a lot of money left, then this might compel the bank to go with a lesser amount of loan.
Hence, if your finances and credit score are in great shape, then getting a home loan is super affordable. By just spending 40% percent of your net monthly income you will be able to own the house of your dreams. The home loan rates are highly subsidized and the customer service of the financial institutions is also magnificent.