Owning a house property is probably everyone’s dream. However, with the skyrocketing price of real estate, it sometimes takes decades to collect enough money to buy a house. This is why you can opt for home loans. Home loans are secured financial loans that help you buy your dream house without draining any hard-earned savings. Home loans are also preferred as they come with a flexible repayment facility. A borrower has the freedom to choose a tenure that is comfortable as per his financial capacity.
However, there are some crucial facts that you should know before you start envisioning the purchase of your house through a home loan. For example, you cannot finance the entire cost of your house through home loans.
If you have been planning to buy a dream home, home loans could be your answer. But you should know about the maximum loan amount that you can avail.
Can You Get a 100 per cent Home Loan in India?
The amount sanctioned by the lender for your loan depends on many factors. You cannot purchase a house with a home loan without paying any down payment. According to the Reserve Bank of India, banks or financial institutions cannot lend you a home loan equal to 100% of your property value. They usually sanction up to 75%-90% of the property as the loan amount.
About the approved loan amount for buyers, RBI has the following mandate –
|Loan Amount (in Rs)||Value of property|
|30 lakh or less||Up to 90%|
|30 lakh to 75 lakh||Up to 80%|
|Above 75 lakh||Up to 75%|
If the loan amount is up to Rs 30 lakh, up to 90% of the property is approved as a loan and so on.
How Is the Home Loan Amount Decided?
The loan amount sanctioned to you depends on your eligibility. If you have high home loan eligibility, you can expect the lender to approve a high loan amount. Many factors determine your home eligibility and the amount you can get depending on your age and location. Your salary and credit score considered too. If you have a good credit score (preferably above 700), lenders can approve a high-value loan. They also consider existing debts to determine the loan amount. If you have other debts, it can lower your repayment capacity and reduce the approved loan amount.
As we have mentioned above, the answer to the question is no. You cannot get a 100% home loan in India. To finance your dream home, you will need to pay some amount as a down payment too. To avail a higher amount of loan, you should try to fulfil the home loan eligibility and improve your credit score. You can use an online eligibility calculator to know how much loan you can avail. Once you ensure that you have a high eligibility, you can apply for a home loan.