What are the Vital Points Physicians Must Consider Before they Buy a Home with a Loan?

What are the Vital Points Physicians Must Consider Before they Buy a Home with a Loan?

According to Property Finder, the demand between apartments and other properties is around 55%, while the supply is about 44%.

However, CREDAI and JLL’s joint reports suggest that India’s real estate sector will be worth $180 billion by 2020. The report also estimates that this sector’s contribution to the country’s GDP will increase to become 11% by 2020, almost doubling what it is today.

It can be said that the demand for housing will grow considering the expansion of this sector.

The finance market also plays a significant role in aiding healthcare professionals to buy their first home. NBFCs and Fintech companies have been critical in this segment with their loans. They also have products targeted explicitly towards customers; for example, home loan for doctors.

Doctors and medical professionals can avail unique features that make these loans lucrative for them.

However, you need to make sure to pick the right time to purchase a house considering you it involves a substantial loan.

Some of the points you need to take care of include:

1.      You are eligible for the loan

Every financial institution lays down various criteria for loans. Generally, the only eligibility for a home loan for physicians is a post-qualification experience.

For example, dentists will need experience of 5 years to apply. Graduate and super-specialist doctors must have 3 years of experience.

Ayurveda and homoeopathic doctors have to show a higher experience span of 6 years. However, DHMS-qualified homoeopathic doctors must have an experience of 15 years. All of these individuals must also own a clinic or house.

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Applying without the necessary eligibility is one of the several mistakes you should avoid when you apply for a doctor loan.

Bajaj Finserv is an NBFC that lays down minimal eligibility criteria for doctors to avail a Home Loan. They can provide ample financing within 24 hours and against minimal documentation.

2.      You will receive the amount you are looking for

Make sure that you are eligible to receive the loan amount you seek. Many a time, a lender might reject your loan application even though you can pay the EMIs. It can happen if your monthly obligations are more than 50% of your income.

Some lenders check your debt-to-income ratio, also known as Fixed Obligations to Income Ratio (FOIR) for loan approval. One of the ideal ways to lower this ratio is to clear existing debts and credit card balance.

Also, use a loan eligibility calculator. This calculator tells you the loan amount you can receive based on your income, net profit (self-employed individuals), etc.

3.      You will be financially able to repay the loan

According to estimates, with Rs. 1 Lakh, you can purchase around 27 sq. ft. of property in Hyderabad and only 5 sq. ft. in Mumbai.

Hence, financial institutions provide up to Rs. 2 Crore with a home loan for physicians to help them buy their dream abode. You have to make sure that you will be able to pay the EMIs before you apply for any amount.

Using a loan EMI calculator is one of the most efficient ways to know that. Almost every lender provides this calculator on their website. Make sure that the loan EMIs will not become a burden on your income.

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4.      You have funds for downpayment

Financial institutions determine the loan-to-value (LTV) ratio – the ratio between your loan and the value of your property – before sanctioning the home loan. The LTV can go up to 90% – meaning you can avail a loan equal to 90% of your property price. You will have to provide the remaining 10%.

Hence, you must ensure that you have funds to pay for this downpayment. Many a time, would-be homeowners avail a personal loan for financing. However, do make sure that you can pay EMIs of both these loans.

Addressing all of these points mentioned above will help you avail a home loan for physicians. Also, make sure you have done proper homework before buying a new home.

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