6 Reasons Why Home Loans are Good for Women
Many people would rather own their own home than rent one. This transformation is possible through various money-lending institutions, like banks. A home loan, called a mortgage, is a sum obtained by an individual. It can be repaid over time in convenient monthly instalments.
A home loan application contains the eligibility criteria and interest rates. It also includes down payments and associated EMIs.
With the rise in real estate prices, home loans for women can help them realize their dream of purchasing a home. The rising cost of real estate has increased the number of home loan applications.
Various Types of Home Loans
New advancements in the financial sector have led to evolving trends in the housing loan domain. A major advancement in this sphere includes the evolution of the different kinds of housing loans. Here are some popular home loan options that you can consider:
Basic Mortgage
This is the most common type of loan that permits you to borrow money from the lender to buy a property of your choice. After making the transaction, you can then pay back the loan to the lender in equal monthly payments. The lender may approve a home loan for up to 80%–90% of the cost of the property.
Loan for Home Construction
Another type of home loan available in recent times is the loan for home construction. You should consider this home loan option if you already own land and want to build your dream home. A home construction loan gets disbursed in installments. It depends on the construction progress. In contrast, in a standard home loan, the lender makes a lump sum payment of the loan amount. This type of loan has an approved amount determined by the estimated cost of the project.
Home Improvement Loan
A home expansion or improvement loan is one of the most popular kinds of house loans. A home expansion loan can be helpful if you currently own a house but wish to add a room or a floor to it. An existing home can get renovated with a home improvement or renovation loan. Millions of rupees might get spent on a home addition or refurbishment. These loans ensure that you will be able to grow or improve even if you need to save more money.
Six Reasons Why Availing of a Home Loan Application is Viable For Women
- Lower interest rates
Lenders believe that women are more trustworthy borrowers than men. They give women unique interest rates on house loans. The main aim is to encourage them to invest in various assets. This makes borrowing money and paying back the principal very affordable for them. The subsidized rate may be 0.05 to 0.1% lower, but it would affect the EMI amount.
- Specific and simple eligibility criteria
Women can obtain a home loan ranging from Rs. 30 lakh to Rs. 3.5 crore to purchase the home of their dreams. To entice female borrowers, more and more lenders are tightening their restrictions. The specific eligibility requirements make it simpler to apply for a house loan. Any woman between the ages of 23 and 58 with at least three years of work experience can apply for a mortgage. This flexibility in age criteria should motivate more women to opt for a housing loan.
- Extension of repayment terms in home loan applications
Given that a home loan can be repaid over up to 25 years, this allows customers to repay the amount via cheaper EMIs. Additionally, there are no fees associated with partial prepayments or foreclosures. This is a major relief for women who are seeking a home loan.
- Tax breaks and reduced stamp duty
The stamp duty assessed is 1% to 2% less for real estate registered in a woman’s name than for a male borrower. With tax deductions, a woman borrower can save a sizable sum. On interest repayment, an amount between Rs. 1.5 and Rs. 2 lakhs can be saved.
- Loan benefits from being a co-borrower
Women co-borrowers are also eligible to apply for loans. While borrowers have a greater and better likelihood of getting loans if they have a high income, the participation of a co-borrower can help equalize the burden of loan repayment.
- Benefits of different housing loan schemes
Co-ownership is necessary under the Pradhan Mantri Awas Yojana (PMAY) house loan program. The PMAY program also provides an interest subsidy of up to Rs. 2.67 lakh. It gives preference to applicants who are women. People from disadvantaged groups and Low-Income Groups (LIGs) who want property ownership can also enjoy the benefits of this scheme. Widowed or single women can gain a lot by applying under the PMAY program.
Prerequisites for Women’s Home Loan Applications
If they meet the eligibility standards, women between the ages of 23 and 58 can apply for a home loan. Before beginning the home loan application process, you should speak with the lender. This is because the eligibility criteria can differ between lenders.
- A salaried employee or self-employed person
- Yearly income as per the lender’s terms and conditions
- A credit score of 700 or higher
- A rented home where the applicant has lived for at least a year
Documents Required for Women’s Home Loan Applications
The following is the list of required documentation for women’s home loan applications:
- Identity Proof: PAN, Aadhar, driver’s license, passport, voter ID, etc.
- Address Verification: Aadhar Card, Ration Card, or Recent Utility Bill is required
- Income Documents: W-2s, bank statements, and ITRs
- Two passport-size photos
The paperwork listed above must be sent with the completed home loan application. The procedure of approving a home loan application and disbursement can take up to 7 days.
Conclusion
Home loans for women are currently in demand due to their versatility and many other benefits. For instance, female borrowers have much lower default rates. As a result, lenders give female applicants for home loans priority. Moreover, home loan applications will get approved with more significant sums. By availing of the offerings of various financial firms, it is now possible for women to own their homes. Together, these characteristics make home financing more convenient and affordable for women.
Check out Piramal Finance for similar blogs that can help you clear any doubts about home loan applications. You may also take a look at the products and services they offer.