Know Your Home Loan Eligibility Through Reserve Calculator

For a basic understanding of how costly a property you can purchase, consider computing your home loan in Mumbai, Home Loan in Pune or home loan in other cities as per your preference using a reverse calculator. One of the major goals which are on the list is purchasing a home. Once you reach the age where you can purchase a home of your own, you even look at how to arrange the required funds. Before heading to any financial institution, you require to check your eligibility and know how much home loan proceeds you require. To do this, you can try out the reverse calculation through the reverse calculator. Zero personal info is needed to use the reverse calculator.

What’s a reverse calculator to check your home loan eligibility?

For usual homes, the purchasing procedure is often looked upon as a medium where you initially shortlist the property and then approach the bank for a home loan on the property. Most of the time, it happens that the property is quite well within your budget, but the required loan amount is not approved by the financial institution. In such scenarios, you must let go of the specific home and look out for other options, either a smaller house in the same area or alike sized house in a comparatively cheaper location. A home loan gets granted by the bank after in-depth checks on your repayment capacity and post review of a few financial and technical aspects of the property that is being purchased. However, even before approaching the lender for a home loan, it is crucial to conduct the fundamental self-check on the loan proceed you can afford to avail and depending on this info, you might select the home or property that matches your budget.

Financial institutions generally have a pre-approved home loan, wherein provide in principle processing or sanction letter, solely dependent on your income. However, this includes payment of a few of the charges every time you place an application for processing of such home loans. So, to have a fundamental understanding of how costly a property you can purchase, ensure to compute your eligibility or affordability using the reverse calculator.

Reverse calculator – Everything you must know

Before using the online reverse calculator, you need to be ready with the listed info –

∙ EMI proceeds (in case you are repaying any)

∙ Repayment tenure

∙ Salary

∙ Age

∙ Home price

Instances of reverse calculation to show home loan eligibility

Read on to understand reserve calculation through this example –

Ms X is a 28-year-old IT expert earning Rs 75,000 monthly income and staying in a rented home in a prominent suburb of Mumbai. She married a year back and now wants to purchase a house and for this, she wants to take a Home Loan in Mumbai. The official retirement age is 58 years, meaning she only has 30 years to make home loan repayments. Also, the 30 years tenure is the maximum repayment tenure provided by the financial institution.

Of the Rs 75,000 that she earns, she must meet the listed liabilities –

∙ Home rent – Rs 25,000

∙ Personal loan EMI – Rs 5,000

∙ Auto loan EMI – Rs 15,000

∙ Recurring deposit, investment, LIC, etc. – Rs 10,000

She holds a corpus of Rs 10 lakh via her savings and assistance from her family, which may use for purchasing her own house.

Here, the overall salary that is available for the EMI consideration equals Rs 55,000 (post-deducting personal loan and car loan EMIs). Financial institutions reduce just the EMIs payable for loan repayments and not the payments towards any investments or saving schemes. Banks permit 50 to 65 per cent of the in-hand salary for home loan EMI repayment, which might differ from one lender to another. So, the highest amount that is available for the EMI repayment equals Rs 35,750 (65 per cent of Rs 55,000). In this specific scenario, let us consider any private bank permitting 60 per cent of the salary for EMI repayment, which may amount to a sum of Rs 33,000, i.e., 60 per cent of Rs 55,000.

Hence, based on the available amount, compute the highest loan which you may get. It is extremely simple and can get computed using an EMI calculator. Here, in this scenario, depending on the EMI amount of Rs 33,000, a maximum home loan equaling Rs 39.50 lakh can be taken up for a repayment tenure of 20 years: Rs 42.70 lakh for a tenure of 25 years and a loan amount of Rs 45 lakh for a repayment tenure of 30 years.

Now, with the maximum loan proceeds of Rs 45 lakh and Rs 10 lakh corpus, the highest budget for a home must be nearly Rs 55 lakh (this includes all the additional government fees and charges). It must be noted that financial institutions allow a fund of just up to 75-90 per cent of the home or property value.

How can an online reverse calculator be used for home loan eligibility calculation?

Here’s a stepwise guide for you to use the online reverse calculator –

Step no. 1 – You can visit any trusted website to use its online reverse calculator.

Step no. 2 – Input the details like the property type, pin code, estimated home value, outstanding EMIs and age of the co-borrower.

Step no. 3 – After you have added all the info, you will get the eligibility home loan proceeds.

How can you be eligible to buy a home early in your career?

Instil the habit of investing and saving

Savings and investing can assist you in purchasing a costly home, even while the bank funds just have a limited amount. In this scenario, Ms X has a corpus of about Rs 10 lakh, owing to which she can just purchase a home of up to a value of Rs 37 lakh. Had this corpus been a little more, then she would have purchased a home of a higher price.

Purchasing a home before the age of 28

As the average retirement age of many salaried individuals in India comes to 58 years, availing of a home loan before this age permits you to be eligible for a higher repayment tenure of as high as 30 years, which enhances your eligibility for a home loan.

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