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The Advantages Of Purchasing A Home Via Lease To Own (with Low Down Payment And Bad Credit)
Folks have different reasons for avoiding owning homes. Some factor is their less than stellar credit scores into the situation. This gives them limited access to mortgage plans, with only those that are laden with ridiculous interest rates usually available. Others who are able to acquire financing have limited cash flows. This hinders them from coming up with considerable down-payment amounts for home purchases. And there are those who hold satisfactory paying jobs, yet their status as new immigrants immediately crosses them out from home ownership opportunities. Whatever the reasons may be, it is refreshing to know that there is a viable option available if you are one of the folks described above, and that is through lease to own. Unsure how this system will work to your benefit? Then read on to find out.
1.You get access to immediate home ownership opportunities. The lease to buy option, just like its name suggests, first starts out as a lease agreement between you and the house owner. But instead of just renting out the property, you are presented with the chance to buy it after the lease agreement expires. This then translates to instant home ownership, as you are essentially already considered the owner of the home the moment you move in. Hate the tile work in the bathroom? Then by all means have it changed! You can make as many improvements or modifications as you want and not worry about what the landlord will say.
2.Only requires payment of really affordable amounts. With home purchasing, you are required to fork over at least 5% of the propertys worth to cover lender fees, realtor shares, and equity payments. With rent to own however, this is not usually the case. All you need to come up with is the option deposit amount that is usually just twice of what you will usually pay for when closing a home rental deal. Whats best, the option deposit will be deducted from the overall price of the home once you finally decide to avail of your option to buy.
3.Provides you with the chance to opt out of buying. There are a number of reasons that could affect your decision to buy the home. First off, if you think the home will lose its value in the future, then you may decide against buying it. Or perhaps through the span of the lease to own agreement you find out the neighborhood is not really somewhere you would like to raise a family. Probably the neighbors are boisterous, or maybe the area has its considerable share of crimes. Whatever your reservations may be, you have the option to not proceed with the deal to buy. And if you indeed decide to abort the deal, you will lose the option deposit, which is a fairly low investment considering all the home ownership opportunities you have gained access to.
Lastly, deciding to avail of the lease to buy option from a reputable seller has a number of benefits when you look at it from a legal standpoint. Firstly, you will be protected from evictions. Questionable home sellers typically just pocket monthly lease payments and not take care of current dues such as mortgage, real estate tax, or insurance coverage. Through a respectable seller, all these dues will already be included in your monthly payments. This way, you need not have to worry about paying them on time, or worse, get caught unawares with an eviction notice from the lender. Secondly, by dealing with a reputable seller, you are protected from unknown transfers while the rent to own agreement is in full effect. So you need not fear of having to give up the home you have been paying for religiously to someone who happens to hold a legally binding deed of transfer.
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Eligibility Criteria for Axis Bank Home Loans
Given the current scenario of the housing market, purchasing a property that you could call your dream home is not easy by any stretch of imagination. The sharp rise in the prices of real estate is a cause of concern for many people who wish to buy a house of their own. If you are restricted by your budget, you can always get a home loan to buy that house you always wanted. However, you need to be eligible for the home loan. Here we describe the Axis Bank home loan eligibility criteria which is not that different from other Indian banks.
To be eligible for a home loan, you need to be a salaried individual or a professional or self employed.
In essence, you must have a source of regular income to meet the eligibility criteria. This is not difficult to understand since the bank expects repayment of the loan, and an earning individual is more likely to repay a loan. In other words, the risk involved in lending money to an earning person is less, and that is why most banks including Axis Bank offer loans to people with a steady income. Now let us discuss the above listed categories in detail.
1. Salaried Individual: You should be a permanent employee in a government based company or a reputed private company. Bank account details and salary slips can be produced in the form of documents. If you are a salaried individual, you can apply for a home loan. If your spouse falls under this category, the loan can be applied in his/her name.
2. Professional: Professionals; that is, doctors, engineers, dentists, architects, charted accountants, management consultants, company secretary, cost accountants only are eligible to apply for a home loan from Axis Bank.
3. Self Employed: If you are running a business or if you have a different source of income, and if you have been regular in filling your income tax, you can apply.
In addition to the above, there are several other factors that determine your Axis Bank home loan eligibility.
1. Income – How much you rake in each month determines the amount of loan you are eligible for. Axis Bank usually keeps the EMI to income ratio between 50% and 60
%2. Age – The applicant should be at least 24 years of age at the time of loan commencement and up to the age of 60 years or superannuation (up to 65 years or less in case of professionals and self-employed individuals) at the time of loan maturity.
3. Interest Rates – Loan eligibility is inversely proportional to the interest rate. If your applicable interest rate is low, your loan eligibility will be high and vice-versa
4. Loan Tenure – The longer your loan tenure, greater the loan amount you would be eligible for.
5. Existing Loans – As a standard, Axis Bank tries to keep the EMI to income ratio between 50 and 60 percent. In case you have any existing loans, the eligibility amount for the new loan will be reduced to maintain that EMI to income ratio.
6. Credit History – Axis Bank also checks your credit history from CIBIL (Credit Information Bureau India Ltd.), which is India’s first credit information bureau. They have a repository of information containing the credit history of consumer and commercial borrowers. This information is available in the form of credit information reports. To ensure that you meet the Axis Bank home loan eligibility criteria, you can access your own credit report by visiting the CIBIL website.