Getting a home loan approval is a blessing for many people wishing to buy a home. This blog aims to unravel the affairs that should be considered when applying for a home loan with a 40,000 salary.
This blog post aims to help home loan seekers by delving into the features that determine your home loan approval and those you are likely to consider.
Just imagine, with a Rs. 40,000 salary, you will only be able to pay a monthly EMI of around Rs. 20,000. You might also have to take note of the amount you borrow and the tenure period.
All this might seem confusing to you. So, here’s a sample table showing the amortization schedule for a home loan of Rs. 30 lakhs with a tenure of 20 years at an interest rate of 8.5%.
| Year | Principal Paid | Interest Paid | Remaining Balance | EMI Monthly |
| 1 | ₹1,00,000 | ₹2,55,000 | ₹28,45,000 | ₹22,500 |
| 2 | ₹2,00,000 | ₹2,30,000 | ₹26,45,000 | ₹22,500 |
| 3 | ₹3,00,000 | ₹2,05,000 | ₹23,45,000 | ₹22,500 |
| 4 | ₹4,00,000 | ₹1,80,000 | ₹19,45,000 | ₹22,500 |
| 5 | ₹5,00,000 | ₹1,55,000 | ₹14,45,000 | ₹22,500 |
| 6 | ₹6,00,000 | ₹1,30,000 | ₹8,45,000 | ₹22,500 |
| 7 | ₹7,00,000 | ₹1,15,000 | ₹1,45,000 | ₹22,500 |
| 8 | ₹8,00,000 | ₹1,00,000 | ₹0 | ₹22,500 |
The total interest payable for this loan is ₹22,25,561, and the total payable amount is ₹42,25,561.
Home Loan EMI Calculator
To calculate your home loan EMI based on a salary of Rs. 40,000, you can use an EMI calculator provided by various financial institutions. This tool helps you estimate your monthly payments based on the loan amount, interest rate, and tenure.
Factors Impacting Home Loan Eligibility for 40K Salary People
1. Work Experience:
Banks prefer borrowers who are stable and have a steady working history.
2. Age:
Usually, borrowers above 27 years are considered more suitable for home loans because the applicants have many years of working life to put forward to repay the home loan.
3. Credit Score:
A credit score of more than 700 is desirable when applying for a loan. They show your ability to repay the loan and credit standing that it has opted for.
4. LTV (Loan to Value):
Mortgage loans provided by financial institutions generally cover 75-90% of the property’s value. The LTV ratio settles the amount that one can borrow.
5. FOIR (Fixed Obligation-to-Income Ratio):
FOIR is calculated as the percentage of one’s net monthly income to the various existing obligations. This percentage should normally be less than 0. 50 so that the loan application can be approved.
6. Property’s Legal:
For loan approval, it is crucial to establish and verify that the property has encumbrances with marketable title and has complied with all the requirements of the relevant authorities. To minimize risks, the banks assess the legal and technical characteristics of the property where the credit is granted.
What is the maximum loan for 40k salary?
For a salary of Rs. 40,000, you can typically get a home loan of around Rs. 28-33 lakhs, depending on your credit profile and the lender’s criteria. The loan amount is calculated based on your net monthly income, existing obligations, and the lender’s policies.
Most banks use either the EMI/NMI ratio or the multiplier method to calculate home loan eligibility on a salary of Rs. 40,000:
– In the EMI/NMI ratio method, banks consider your existing EMIs and net monthly income (NMI). Applicants with an EMI/NMI ratio below 60% are usually eligible for a home loan.
– In the multiplier method, banks multiply your NMI by a factor between 60 and 72 to determine the maximum loan amount.
For example, Rs. 40,000 x 72 = Rs. 28,80,000.
Home Loan Challenges on ₹40k Salary
Securing a home loan on an Rs. 40,000 salary can be challenging due to high property prices in most cities. To overcome these challenges, consider:
– Compromising on property size or location to find a more affordable option.
– Making a larger down payment to reduce the loan amount and keep EMIs manageable.
– Co-applying with a spouse or family member to increase your loan eligibility.
How Brick & Bolt Can Help You to Build a House
Brick & Bolt offers comprehensive solutions to streamline the home construction process, potentially reducing costs and ensuring quality construction.
Their services include:
– Offering vastu-compliant house designs that suit the amount of money one plans to spend on the project.
– Helping with applications for permits and other approvals.
– Superintending of construction to — concerning timeliness of construction to check the quality.
– Continuing plans post-construction, which entails providing customers with maintenance and warranty services.
With Bricknbolt, you can easily set your eyes on the prize, which is your long-term financial goals, while the specialists take care of the finer details when constructing the home of your dreams.
Conclusion
Be wise when choosing a home loan and ensure that you meet all possible qualifications needed to access the money. It may be interesting to consider the pressures and perhaps pursue co-applying or gain support from companies such as Brick & Bolt to ease the pressure of finding a home.