When a couple makes a joint
application for a home loan, if one clubs both their incomes, what is the
extent to which the bank sanctions the amount? Why?
The loan eligibility is
directly linked to income of the borrower and security value. Normally banks
put an upper cap on the EMI to Income Ratio/FOIR (Fixed Obligation to Income
Ratio). This cap is fixed by banks to ensure that the borrower is left with
adequate income to meet his family expenses even after paying all the monthly
loan repayment commitments. Clubbing the income of a spouse is generally
permitted, provided the spouse joins the loan as a co-obligant. Clubbing of
income enhances the loan eligibility as the FOIR reduces when income increases.
The FOIR may range between 55% and 75% depending upon the profile of the
customer and the merits of the application. Some banks decide the eligible loan
amount in terms of the annual income. For instance, twice the annual income or
thrice the annual income and so on, in order to make it more convenient to the
customer to make out. Here also, the fundamentals are one and the same and the
FOIR etc. are worked as a part of the loan processing.
If a project is still at the
pre-launch stage, how can a buyer finance the purchase?
The buyer of a property, which
is even in the pre-launch stage, has the option to approach a bank for availing
housing loan. Bank funds such cases after ensuring that the legal and technical
aspects of the project is clear and fits into the policy of the bank. In case
of reputed housing projects, bank conducts a project approval process wherein
the legal and technical aspects, credibility of the builder and viability of
the projects are closely looked into. Once the bank approves the project,
individual buyers need not go through all the formalities of getting legal and
technical clearance for each unit.
