Are you planning on taking out a home loan to purchase your dream house? Then you might be curious about the requirements or eligibility of taking out a home loan. You can take out home loans for various amounts depending on multiple criteria judged by the lender. Among these criteria, the most significant factor that most banks check is the borrower’s monthly income. Taking home loans from renowned banks like ICICI home loan would require a thorough inspection of the bank’s eligibility criteria. Are you curious to know the minimum salary requirements for a home loan? Continue reading further to learn more.
What effect does the loan amount have on the required minimum salary?
You can only find your ideal house for your salary by getting up early, doing your research, and finding the property that fits your needs while still being within your budget. It is possible to save up an additional 10% – 25% down payment on time if you know that a house loan is funded to 75% – 90% of the property value.
With this information, you can get a rough idea of how much money you’ll need to put down in a house upfront. Your projected monthly home loan EMI should not exceed 50%-60% of your net monthly wage without any other debt requirement. Lenders prefer a loan-to-income ratio of 50 to 60% for borrowers with additional loan commitments. Based on these factors like the monthly income and expenses, the loan amount will be different.
What happens if the lender thinks your salary isn’t enough to pay the home loan EMI?
Given that you must have worked hard for your money before applying for a home loan to purchase your ideal home, it might be a subject of disappointment for you, and understandably so. It’s not the end of the trip, though! There are a variety of methods to acquire a house. But before applying, you should check the bank’s interest rate, for example, the ICICI home loan interest rate if you opt for the bank’s home loan.
It reduces the house loan amount, which reduces the Equated Monthly Installment (EMI) to a level that you can afford to pay from your monthly budget. You can still apply for better home loans even if you meet the bare minimum salary requirement, that is, via making down payments. You may satisfy the minimum wage criteria even if you pay the required down payment.
How else can you meet the minimum salary requirements for a home loan?
- Consider using the extra money from your Provident Fund – You may use your Employer Provident Fund (EPF) money to buy property. The EPF contribution or 36 months’ salary and dearness allowance may be withdrawn from your provident fund account for a property purchase. But to remove from your EPF for this reason, you need to have worked for at least five years. Banks might consider lower interest rates, so it is advised that you consult beforehand, the ICICI home loan interest rate is among the lowest.
- Adding co-applicants can help you out – Having a co-applicant who earns a wage helps meet the minimum salary requirements for your home loan. You and the co-applicant, who may be a member of your family, will split the monthly payment on this home loan. Individual financial burdens will be reduced when the EMI is shared amongst the family members.
- Look for a house with a lower price tag – Even if you’ve exhausted all other possibilities, this will almost certainly get you a house. You should purchase a property that is lower since your minimal earnings are not enough to cover a bigger home loan payment. This will reduce the amount of money needed to buy a house, which will increase the lender’s confidence.
These are all how you can meet the minimum salary requirements for home loans. Banks offering loans like the ICICI home loan provides various benefits to the applicants who are trying to apply for a home loan, and you too can do that by keeping the above points in mind. To know more about the best offers on the home loan, kindly visit Apnapaisa and get to know about various deals on offer from the most reputed lenders.