I am a 42 year old graphic designer working freelance out of Indore. I am constructing another floor in my house and need money for it. Please advise on the best options considering that I am not employed in any company; I want the best possible terms in a home loan so that my monthly installment is minimal.
-Name withheld on request
The outflow on your home loan will depend on your loan tenure and the rate of interest offered to you. Usually, someone in your age group will be provided with a period of 15-20 years. The interest rate offered to you will be determined by the lending institution you contact and the credit appraisal done by them. In your specific case a credit check will be done on a number of factors such as your bureau score, current assets and liabilities, and your business and cash flow assessment. For the same, you will be asked for your professional qualification, copies of the contract and proof of receipt (bank statement, TDS certificate etc.). The lender will take your vintage, positive customer references and longevity of contracts in business as an added comfort.
Based on their review of these documents and the income tax return filed by you, an estimated eligibility will be calculated. You can increase the eligibility by adding your spouse/parents as a co-borrower, and get better terms like interest rate, loan repayment tenure, etc., if they have an independent source of income (salary, rent or pension) etc.).
Several lenders have various guarantee options available that can help you extend your repayment tenure to a maximum of 30 years, which can also be explored.
(This question is answered by Amit Dewan, Chief Distribution Officer, India Mortgage Guarantee Corporation)
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