Housing Finance in India and Appraisal Process of Home Loans with Specific Reference to Indian Overseas Bank

Owning a home is one of lifes biggest aspirations of a person. Home loans are the most easily accessible financial supplement to purchase a persons dream home. A resident or non-resident individual who is planning to buy a house in India can apply for a home loan at the banks or Housing Finance Institutions. Once the maximum amount to put into the property has been decided, the Housing Finance Institutions or Banks will let the customer know that how much he/she is eligible for and this helps to plan out the budget. In order to get the housing loan the customer has to go through a Credit Appraisal process. Each bank / Housing Finance Company (HFC) has its own norms and standards to evaluate borrowers ability to repay the loan and the credit worthiness of the customer to be eligible for loan application. During this whole process, the loan eligibility and the repayment capacity of the borrower are established on the basis of his/her Disposable Income, Stability and continuity of income, Age, Educational qualifications, Number of dependents, Co-applicants income, Employer, Nature of employment or business (if self-employed), Experience, Securities proposed, Taxation history, Assets owned, Alternative / additional sources of income, Other loan obligations, Investments, Saving habits, Other present and future liabilities. A prospective borrower has to go through the various stages (i. e. Financial, Legal, Technical etc. ) of credit appraisal process as practiced by different banks / HFCs. This study mainly focuses on the guidelines followed by commercial banks in India regarding the appraisal process of housing loans with specific reference to Indian Overseas Bank.