Lenders consider a host of factors before granting a home loan. The parameters and criteria to determine the eligibility and quantum of loan differ from lender to lender. An individual planning to apply for a home loan should be aware of these factors. Some of these factors have been discussed below.

Source of Income

Banks and other lenders have different eligibility criteria when it comes to a salaried or a self employed person. Banks are of the opinion that a person earning income from salary has a higher repayment capacity than a self-employed person because of stability in his income while lenders other than banks hold a contrary view. Therefore if a bank charges 25 percent from a salaried professional, it will charge 35 percent from a self-employed person for the same amount of loan.

Sector of employment

The terms at which you can avail loans depend on your employment sector. Banks classify different sectors under different risk levels. Some sectors may be more stable when compared to others. This list differs from bank to bank. Therefore if an individual is working in an industry that has had difficult times in the past, then he might be charged a higher rate of interest as compared to another individual working in a different, more stable industry.