{"id":548,"date":"2021-03-28T07:56:15","date_gmt":"2021-03-28T07:56:15","guid":{"rendered":"https:\/\/www.loanfasttrack.com\/blog\/?p=548"},"modified":"2022-11-05T11:05:19","modified_gmt":"2022-11-05T11:05:19","slug":"8-business-conditions-for-applying-home-loan-or-mortgage-loan","status":"publish","type":"post","link":"https:\/\/www.loanfasttrack.com\/blog\/blog\/finance\/8-business-conditions-for-applying-home-loan-or-mortgage-loan\/","title":{"rendered":"Hey Self-Employed! Know the Following 8 Business Conditions if you are Applying for a Home Loan or Mortgage Loan."},"content":{"rendered":"\n
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Mr. Gopal is a proprietor of\na small company, which is a new start – up. Gopal is planning to purchase\na new residential apartment<\/strong><\/a> for his family. Gopal ran pillar to post, made multiple\nloan enquiries with the home loan lenders<\/strong><\/a> for his housing loan requirement. He also\napplied with the lenders (Bank\/NBFC\/HFC) but faced rejections. Tired of\nthe rejections, Gopal thought of applying for a mortgage loan, by providing\nproperty security to the bank instead of going for a house loan, yet faced\nrejection of his\nmortgage loan application<\/strong><\/a>.   <\/p>\n\n\n\n

Why was he not eligible for a\nloan? Let us see what are the reasons\nfor his loan rejections<\/strong><\/a>. <\/p>\n\n\n\n

Lenders (Bank\/NBFC\/HFC) have\ntheir own guidelines, have their own funding rules and regulations, which makes\na borrower eligible or non-eligible\nfor a loan<\/strong><\/a>.\nMentioned below are 8 such conditions of the businesses for the self-employed:\n– <\/p>\n\n\n\n

Business Conditions for Self \u2013Employed Applying for\nHome Loan and Mortgage Loan:<\/strong><\/h2>\n\n\n\n

1) Business Age:-<\/strong><\/p>\n\n\n\n

How old is the business? is\nvery important. Since how long the borrower is running the business i.e., the\nbusiness continuity, does matter. Number of years into the business decides\nwhether he qualifies to get\na home loan<\/strong><\/a>. It\nis one of the important conditions of the lenders because it shows the\nregularity of the borrower\u2019s income. A business should be a minimum 3 years\nold. <\/p>\n\n\n\n

2) Business Proof: –<\/strong><\/p>\n\n\n\n

The business must be\nregistered and a loan borrower must have a proper business proof. Company Pan\nCard, Ghumastha license, MSME registration certificate, Aadhar Udyog, valid\nPartnership Deed, GST, etc. are the valid business proofs. <\/p>\n\n\n\n

3) Company Profile: –<\/strong><\/p>\n\n\n\n

Borrower must provide company\nprofile details on its company letterhead. The company profile must contain\ncompany details, official address, registered address, company owners\/directors\/partners,\ncompany structure, type of company, company incorporation date, nature of\nbusiness, number of employees, etc.<\/p>\n\n\n\n

4) Mandatory Office:-<\/strong><\/p>\n\n\n\n

Residence cum office\noperation of the businesses is usually not considered by the lenders. If the\nloan borrower is running\/operating his business from home, such a profile may\nnot be considered for applying for a loan<\/strong><\/a> by some of the banks. For example, home\ntuitions, commission agents, brokers, insurance agents, real estate brokers are\nsome of the profiles of the borrower which may face difficulty in applying for\na loan. For such profiles who operate their business from home, banks have\nspecial products under which they make them qualify for a loan. But remember,\nunder such a product, the borrower may require to pay higher charges and interest\nrates to get the loan<\/strong><\/a>.   <\/p>\n\n\n\n

5) Current Account: –<\/strong><\/p>\n\n\n\n

Any self-employed individual\nwhether, proprietor, partner, director, professional, free lancer and even the\nprofiles with residence come office business operations, it is mandatory to\nhave a current account. All the business transactions must route only through\nthe current account. Current account with any bank either private or a\nnationalized bank is acceptable. <\/p>\n\n\n\n

6) Banking Transactions:-<\/strong><\/p>\n\n\n\n

Just by merely opening the\ncurrent account is not beneficial. The current account must reflect his\nbusiness transactions. At times the borrower may not be eligible for loan as\nper the ITR copy but if he has maintained good banking transactions, he might\nbe eligible for loan under the banking product. Banking transactions and\naverage balance maintained in the account is the basis of the banking product.<\/p>\n\n\n\n

7) ITR Copy:-<\/strong><\/p>\n\n\n\n

Latest 3 years duly filled ITR copy is\nmandatory along with Saral Copy, computation of income, Balance Sheet, Profit\n& Loss account and Capital Account. <\/p>\n\n\n\n

ITR must be filled on year-on-year basis.\nSame dated ITR for the last 2 years is not accepted. A minimum of 6 months gap\nbetween the fillings of the two ITR is mandatory.<\/p>\n\n\n\n

For self-employed of new\nstart-ups, companies with ITR not filled, loans cannot be provided.<\/p>\n\n\n\n

8) Cash Income Not Considered: – <\/strong><\/p>\n\n\n\n

No cash income is considered\nfor home loan<\/strong><\/a> or mortgage\nloan<\/strong><\/a>. If the\nborrower is running a business and is making cash profits and cash incomes,\nsuch income is not considered for loan. Cash incomes of the LIG, EWS & MIG\ncategories can be considered only for availing a home loan under PMAY Affordable\nHousing Loan schemes. Examples of small cash business are, home tuitions,\nvegetable vendors, scrap business, pan shop, general store, grocery shop, etc.\nHowever, some lenders may also consider providing a home loan to a loan\nborrower other than the LIG, EWS & MIG provided he maintains a proper cash\nregister of his sales. The cash register must maintain the daily sales figures\nand the entries of day-to-day cash expenses and incomes. However, the borrower\nwith cash income is exceptionally charged with higher interest rates and fees.<\/p>\n\n\n\n

On the other hand, cash\nincome for availing\na mortgage loan<\/strong><\/a>\nis usually not considered by the lenders – Bank\/NBFC\/HFC. <\/p>\n\n\n\n

By-\nLoanfasttrack. <\/p>\n\n\n\n

Loanfasttrack is a Mumbai\nbased loan provider company since 2015 offering loan services in Mumbai on– housing\nloan in Mumbai<\/strong><\/a>,\nmortgage\nloan in Mumbai<\/strong><\/a>,\npersonal\nloan in Mumbai<\/strong><\/a>,<\/a> <\/a>business\nLoan in Mumbai<\/strong><\/a>,\nunsecured business loans<\/strong><\/a>,home\nloan transfe<\/strong><\/a>r<\/strong><\/a>, top-up loans and loan\ntransfers<\/strong><\/a>.\nLoanfasttrack is a direct sales associate with leading banks namely, ICICI\nBank<\/strong><\/a>, HDFC\nLtd<\/strong><\/a>, Canara\nBank<\/strong><\/a>, Citi\nBank, Piramal Housing Finance, etc.<\/p>\n\n\n\n

Loanfasttrack\u2019s specialized services includes providing:<\/p>\n\n\n\n