While buying or renting a new house or flat, getting a home loan is one of the initial steps that you will have to undertake. Getting home loans from banks such as columbia bank Aberdeen can be tricky if you do not know what the procedure is like. So, here is how you can get a home loan.
Getting to know your loan eligibility
The first thing to do before applying for any kind of loan is to know the amount of loan you are eligible to get. Your eligibility is calculated by your repaying capacity which is based on your monthly surplus income. The higher your surplus income, the more loan you can apply for. This is because banks assume that at least 50% of your surplus income can be used to repay your loan.
Maximum limits for home loans
At least 10-20% of the home’s purchase price is expected by lenders as a down payment. The rest of the 80-90% of the value is allowed to be financed by a bank. Even though the bank will give you the number indicating the amount of money you are eligible to finance, there is no necessity to get a loan that leads up to that amount.
It is crucial to have a co-applicant for your home loan application. Even if the house you’re buying is not going to be shared, ask a close family member to be the co-applicant for your home loan.
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Most banks require a photograph, address proof, salary slip, legal documents related to the house purchase. You will also require an income-tax return slip and the previous 6 months’ balance sheets. You might also require to have collateral security.
Applying for a home loan is a lengthy process, knowing the right procedure is necessary to get home loans without hassle.