A need for money can arise anytime. Hence, people prefer hiring a tenant to earn additional income from their property. But, sometimes, the situation gets worse and thus you look for loan options. So, today we will let you know about how to avail a loan against the rental income. Scroll the page down and read about the concept, features and ways to apply for a loan against rental income.
These days’ home loans are considered as one of the best and easiest way to buy a dream home. Almost all the salaried class home buyers choose this option and hence they find out a bank which offers lowest interest rates so that they can manage their EMIs easily. So in order to manage regular EMIs, one important variable which plays a major role is home loan tenure.
Home loan tenure means the length of time that will be taken by the borrower to repay the loan along with the interest. While the tenure varies from 5–20 years, some banks also allow the time up to 25 or 30 years. However, the home loan tenure and home loan amount are directly proportional to each other. So, higher the home loan tenure, higher is the home loan eligibility, subject to the minimum margin requirement relative to the value of the property.
The loan-to-value (LTV) ratio is a ‘financial term’ used by lenders to express the ratio of a loan to the value of an asset purchased. It is a number that describes the size of a loan compared to the value of the property securing the loan. While taking a loan, this value plays an important role as it determines one’s eligibility for loan approval.
The loan to value (LTV) ratio is calculated by dividing the loan amount by the total value of the asset securing the loan. It is usually expressed in percentage terms. A higher LTV ratio means more risk because the assets behind the loan are less likely to pay off the loan as the LTV ratio increases.
The term Top-Up Loan is new to people and those planning to avail homeloan are keen to know more about this loan. So, let us explain the intricacies of the same.
Buying a house is always a dream for any buyer. So when you buy a property on home loan, you must keep many things in mind whether you will be able to repay it or not. Sometimes, repaying home loan becomes a difficult obligation if one fails to pay regular EMI. This may happen as certain circumstances are beyond one’s control, such as loss of job, temporary extra expenditure or prolonged illness which may lead to financial crisis. But banks do not understand these problems as they were told to go through their own policy process.
Even the government of India these days has strengthened the laws governing non-performing assets (NPAs), by giving more power to the financial institutions, to recover the NPAs. And the worst part which is affected if you become a defaulter is your credit score. This will make difficult to avail loans in the future. Even a legal notice is sent to the defaulter if one misses two EMIs continuously.
Home loan are the two most heavy weight words in life. Thus, we people think before applying for this type of loan. The interest rates, documentation, and other technicalities make the loan sanction procedure tiring and lengthy. Unfortunately, not every home buyer has a strong financial background to pay the entire cost from his or her pocket.
In this situation, we opt for a home loan that helps in the property purchase. Also, we get time to repay the loan. But, it’s always better to close the home loan books as soon as you for possible.