How Hard is it to Get Your Second Home Loan?
If you’ve been toying with the idea of buying another house, here’s some great news for you. Banks today offer a Home Loan for the second time. Although your second Home Loan may not differ much from your first one, getting your loan sanctioned isn’t really a cakewalk.
When you apply for a second Home Loan, the terms and conditions for the repayment will be more stringent as opposed to your first one. You will be asked to pay a heavy down payment and a higher interest rate as well. Ideally, banks will grant loans that aren’t more than 75% of the value of your second home. With these complications, you are left wondering about how to buy a second home.
Here’s How to Qualify for a Second Home Loan
Earn The Ideal Qualifications
You need to make a financial plan and truly consider the affordability of the new property. Save money for the down payment as the loan amount sanctioned to you depends on it. The lesser the amount you apply for, the faster and easier your sanctioning process will be. If possible, pay all your past debts including your study loan, car loan and so on. A new property means double the maintenance bill, electricity bill and EMI payments, so you need to stay clear of other debts. Make sure that monthly loan repayments for your second loan aren’t more than 35-40% of your pre-tax income.
Choose An Attractive Property
The challenges of getting second Home Loan can be daunting if you don’t choose the right property. Make sure that the property you want to invest in has ample scope for capital appreciation. A bank is more likely to sanction the loan to you if its sees that the property you want to buy is quite valuable. The locality of the property should definitely offer some scope for development in the future. The possibility of finding future buyers for your property is one of the criteria that banks consider before granting a Home Loan.
Be clear about your intentions regarding the property. If you’re planning to buy a house just as an investment, be sure to admit that fact. The same goes if you want to rent out your flat out once you buy it. Banks generally ask for higher EMIs when they get to know that you plan on renting the place. In case you hide this fact and the bank finds out about it later, you may be asked to pay your loan back entirely or worse, you may need to relinquish your property to the bank.
Opt for a Joint Home Loan
Here’s what you need to know about second Home Loan eligibility when you opt for a joint loan. You can ask your parents, siblings or spouse to apply for a loan with you. This is possible only if the property is going to be jointly owned by the two people who’re applying for the loan. Banks are always ready to offer higher loan amounts when there are two applicants; the increased repayment capacity definitely seems attractive to them. The loan amount that you’re granted also depends upon the income of the applicants. Ideally, a joint account is made wherein both the partners pool in their money and then pay the EMIs.
Although taking a second Home Loan can be quite difficult, it can also prove to be quite fruitful in the long run, fetching you an investment that’s completely worth the money. You can try the online Home Loans offered by Bajaj Finserv, which is available at low rate of interest.