Everyone wants to have his own house one day, but buying or building a house is not that easy. Buying a house takes all the savings of a middle-class man. Even after that, when the money falls short, then there is a need for a home loan. About 90 percent of people build a house by taking a home loan. While giving a home loan to a salaried person, the bank checks his salary, bank statement, etc., but do you know how home loans are given to self-employed people? How do banks check how much home loan can be given to them and what should be the interest rate? Let us know which 5 things banks keep in mind.

1- Age is a big factor

While giving a home loan, every bank definitely looks at the age of the loan taker. While giving loans to self-employed people, a lot of attention is paid to age. If the age of a self-employed person is less, then it is possible that he can get more home loans and also get a loan for a longer period. In such a situation, that person does not have much difficulty in repaying his home loan, because the EMI can be small.

2- Necessary documents will be checked

Before giving a home loan, the bank takes many important documents from the applicant, based on which the bank checks the financial condition of that person. Under this, the bank asks for things like income tax returns, profit-loss statements, balance sheets, and bank statements. From these, it is estimated how the financial condition of that person is. Also, it is known how the business of that person is going. With these, the bank reduces the chances of its home loan going bad.

3- Net income will be calculated

The net income of any self-employed person is very important for the bank giving home loans. On the basis of this, the bank comes to know how much money that person gets every month. The bank finds out this from many types of documents and then gives home loans on that basis. Net income helps the bank to understand whether the person will be able to pay all the EMIs on time or not.

4- Credit score will be checked

Before giving a home loan to any person, the bank also checks his credit score. This shows how he is regarding credit, that is, whether he pays the loan on time or not. If the credit score of a self-employed person is high, then he can easily get a home loan, but if the credit score is bad then it may be difficult to get a home loan. Let us tell you that the credit score remains between 300-900.

5- Other sources apart from business

The bank also sees whether the self-employed person is earning from any other source or is only dependent on business. This income from other sources can be rental income, income from investment somewhere, or income from real estate. If that person is earning from other sources as well, then it is a good sign, which increases the possibility of getting a home loan easily.

Disclaimer: This content has been sourced and edited from ZEE Business Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.