How can a self-employed person obtain a mortgage?

I am a 42 year old graphic designer working freelance in Indore. I am building another floor in my house and I need funds for the same. Please advise me on the best options as I am not employed by any company; I would like the best possible conditions for a home loan so that my monthly payment is at a minimum.

-Name masked on request

The outflow on your home loan will be a function of the term of your loan and the interest rate offered to you. Usually a 15-20 year old tenor will be provided to someone in your age range. The interest rate offered to you will be determined by the lending institution you approach and the credit score performed by it. Credit checks in your specific case will be done on several factors such as your credit rating, your current assets and obligations, and your business and cash flow valuation. For the same, you will be asked for your professional qualification, copies of contract and proof of receipt (bank statements, TDS certificate, etc.). The lender would take your vintage in the business, positive customer references, and contract longevity as added comfort.

Based on their review of these documents and your filed tax returns, an approximate eligibility will be established. You can improve eligibility and get better terms like interest rate, loan repayment period, etc., by adding your spouse/relative as a co-borrower, in case they have a source of income self-employed (salary, rent or board, etc.)

There are various collateral options available from many lenders that can help extend your repayment period to a maximum of 30 years, which can also be explored.

(Question is answered by Amit Diwan, Distribution Manager, India Mortgage Guarantee Corporation)

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