Monthly Archives: January 2018

Required Documents For Home Loan

Own home is only a single place where we feel comfortable, safe and independent. Everyone has a hope their own house but due to the fund arrangement, this dream seems impossible.
But nowadays getting a home loan is quite easy and convenient. You just need to follow few necessary steps and submitting fair documents to your lender. With proper documentation, you can get your home loan in few days.

Before going to approach a home loan lender, it’s very important to gather all required documents for Home loan application and its successful approval. Bank and NBFCs ask for the following documents before sanctioning the Home loan. Let’s have a look:

Identity Proof (Anyone from the following)

�Driving license
�Voter ID
�Passport
�PAN card
�Aadhaar Card
�NREGA Card

Age Proof (Anyone from the Following)

�Driving License
�Passport
�PAN card
�Birth Certificate
�10th standard Mark sheet

Address Proof (Anyone from the following)

�Driving license
�Voter ID
�Passport
�Ration card
�Utility bill � Telephone, Electricity, Water, Gas, Postpaid Mobile (minimum 2 months old)
�Letter from any recognized Government authority verifying the residence address of the customer
�Letter from your Employer (in case no other proof is available)
�Bank Statements / Passbook / Other Government documents such as post office Passbook
�Property or Municipal tax receipt
�Pension or family pension payment orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address
�Documents issued by Government departments of foreign jurisdictions and letter issued by Foreign Embassy or Mission in India

Income proof

Income proof and property proof vary for salaried individuals and self-employed individuals.

Self Employed/Businessmen

�A brief introduction to your business/profession
�Balance sheet, profit and loss account statement of income
�Proof of income tax returns for the last 3 years certified by a CA
�Receipts of advance tax payments made (if any)
�A photocopy of Registration Certificate of establishment under Shops and Establishments Act/Factories Act
�Certificate of Practice for professionals such as doctors
�Proof of investments (FD Certificates, Shares, any other fixed asset)

The Income Factor While Buying A Car

The paycheck of your income is spent over a number of things ranging from household items to your monthly payments and dues. When you purchase a car, the gross monthly income becomes a key factor in order to ascertain your creditworthiness. Income provides a clear gateway to the lender to evaluate your plan of repaying the auto loan. Asking the right questions can help you gain clarity on how income can play a huge role in buying a car. A question we frequently struggle with is: Is income influential or irrelevant to the decision of purchasing a car?

Buying a Car: Is your Income important?

So, which income-related questions should you ask yourself as you ascertain the purchase of your car?

Q1) Can I leverage my strong debt-to-income ratio in order to obtain a new car?

The common misconception surrounding cars is that the difference between the incomes of two people determines your auto loan approval. In other words, it is to say that a person with a higher income would be more likely to purchase a new car or get faster auto loan approval. However, a lender ascertains your creditworthiness primarily through your debt-to-income ratio and then through the value of your income. A debt-to-income ratio compares your monthly debts against your income before taxes. Lenders consider a debt-to-income ratio of 36% or lower favorable. Therefore, a strong debt-to-income ratio will put you in a good position to purchase a new car with a long life and low maintenance costs.

Q2) Will I be able to manage the interest rates?

The most effective way to plan the purchase of your car is by assessing the total amount of the auto loan including the interest rate. A winning move to earn you brownie points while negotiating a lower interest rate is to pay a large down payment. The more money you put down, the larger will be your savings in terms of interest rates over the loan term. As you pay a portion of your income in the form of a down payment, it improves your creditworthiness and provides less risk to the lender.

Q3) Can I improve my approval chances with a high credit score?

Along with a good income, a good credit score equally increases your chances to get approval for the auto loan. A good credit score positively displays how well you have managed your finances and credit. A FICO score of 700 or above is ideal for quick approval. You could start by improving your credit score before you set out to purchase your car. A few methods to build your credit score include paying off any pending debts, keeping a low balance on credit cards and becoming a cosigner. As a good credit score can overshadow the situation of a low income, it becomes imperative to get your credit score to an ideal level before purchasing your next car.

Purchasing a car is no longer a luxury but an absolute necessity. So, naturally, while purchasing a car we want to make sure we get the best deal. In order to purchase your dream car, you need to ask yourself the right income-related questions and evaluate your financial standing. Moreover, with the right preparation about debt-to-income ratio and credit score, you can get one step closer to the car of your dreams.

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