Banks and financial institutions offer maximum loan amounts based on the borrowers’ income. The property and the existing obligations of the borrower also determine the maximum home loan they can apply for. You will come across many lenders who do not mention their maximum home loan amount. They might probably mention loans above a specific amount instead of the maximum limit.
But you need to know the maximum home loan limit you are eligible for. So when the time arrives for you to purchase a property, you will have to apply for a housing loan. Since the maximum home loan amount depends on your borrowing potential and creditworthiness, you must keep your credit scores high.
This article will provide an insightful overview regarding the maximum housing loan eligibility borrowers are capable of. Further, you will learn about certain factors that determine the maximum amount of home loan you will be granted. Let’s dig in.
Factors Determining Maximum Home Loan Amount
Listed here are some factors that will determine the maximum amount of your home loan:
The eligibility criteria for a home loan varies from lender to lender. And only if you meet those criteria will you be considered a potential borrower. Banks and financial institutions look at your credit history to determine your repayment habits.
2. Down payment
Property builders seek around 20% to 30% of their property as a down payment from their buyers. So you need to save a significant amount for the down payment before you finalize your property. Make sure you minimize the borrowing amount as it will considerably reduce the interest outgo.
There are plenty of borrowers who take on an extra burden for EMI payments. Many think things will become easier with time as their income eventually increases. But what if other unforeseen circumstances turn down the desired raise?
So you need to make changes in your loan tenure to either increase or reduce your EMI amount. This will entirely be determined by how much you can afford to pay.
4. Property Valuations
The value of your desired property can either make or break the housing loan situation for you. The eventual home loan disbursal entirely depends on the ascertained property value. So you need to make sure your overall findings are mentioned in the technical report.
5. Monthly Income
Remember, your monthly income determines your repayment potential. So the ratio works like this – the higher you earn, the greater your repayment potential will be, and vice versa. And after you provide your lender with your income proof, they will carry out the income appraisal process before granting a home loan.
6. Existing Obligations
Any existing loan or credit card obligations might have a massive impact on your maximum home loan amount. This situation might significantly provide you with a much lower home loan amount. Nevertheless, if your existing obligations are not extensively higher, you can receive a higher loan amount.
Factors Determining the Eligibility of Your Home Loan
Certain crucial factors determine whether or not you are eligible for a home loan. Some of them are:
- Must be above 21 years of age
- Must have a stable monthly income of Rs. 20000 and above
- Must have a job continuity and income history for at least three years
- Must have a good CIBIL score
Maximum Loan Amount Offered by Various Lenders
The maximum loan amount widely differs from lender to lender. Here is a comparative listing determining the same.
|Loan Lender||Rate of Interest||Maximum Loan Amount|
|Standard Chartered Bank||6.99%||Upto Rs. 35 crore|
|State Bank of India||6.70% to 6.99%||Above Rs. 75 lakhs|
|HDFC Limited||7.30% to 7.85%||Above Rs. 75 lakhs|
|ICICI Bank||7.75%||Above Rs. 75 lakhs|
|LIC Housing Finance||7.90||Upto Rs. 15 crore|
Remember that the maximum home loan amount will vary according to the lender you choose. And before opting for a housing loan, make sure you fulfill all the requisite criteria. Only then will you be granted your desirable home loan.