The great English novelist, Jane Austen, once said, ‘There is nothing like staying at home for real comfort.’ The saying holds great emotional value for Indians as most of them attach great importance to buying a new home. However, buying a new home requires a significant investment and only a few people can afford buying a home with their savings.
This is where the financial organisations play a vital role as they help in making your dream come true by offering you a home loan. It is a convenient way to purchase a home as you get the flexibility to repay the amount in smaller instalments over a long period up to 30 years. Also, with the growing competition among lenders, the interest on housing loans is quite affordable, which makes availing a loan a smart financial choice.
Home loans for self-employed
The self-employed professionals can get home loans as easily as salaried employees who have a regular income source. Today, many lenders in India offer special home loan schemes that are specially designed to meet the needs of the self-employed.
Generally, the lenders divide the self-employed borrowers into two groups – self-employed professionals and self-employed non-professionals.
The professionals include engineers, lawyers, doctors, etc. who have a formal qualification and are experts in their own domain and have set up their personal business. The non-professionals group include contractors, brokers, traders, commission agents, etc. These are people who don’t have a formal qualification/degree and run their business.
What is the eligibility to apply for a self-employed home loan?
The self-employed individuals can apply for a home loan either individually or they can opt for a joint loan with a close family member. When you apply for a home loan, the lenders generally consider the following key factors to determine your eligibility.
Income and repayment capacity of the borrower
The lender would require you to submit proof of the IT returns filed for the last three years and the audited business statement like profit and loss account statement and balance sheet for the last two years.
Age – The young you are, the more time you have to repay the loan and you can apply for a loan with a longer tenure. On the other hand, if you are older, you may need to make a larger down payment for buying the home.
Qualification – Some lenders consider the borrower’s educational qualification as one of the critical factors to assess their eligibility.
Dependent family members – The disposable income you have is a vital factor that reflects your repayment ability. The lenders assume that if the borrower has a high number of dependents, the lower is their disposable income and repayment capacity.
The lenders generally consider the self-employed individual’s ability to generate income and the profitability of the business enterprise as one of the critical factors to determine their eligibility. So, if you can show the lender that you have a solid business that can yield valuable profits and if the same is reflected through the business-related financial documents, you can get the desired loan without any hassles. Also, it is advisable to keep your accounting books and tax filing up to date before applying for the loan.
If you are a self-employed individual, availing a home loan is not as difficult as it may seem. Make sure that you are aware of the lender’s eligibility and you can easily get the desired amount.