It is a dream of everyone’s to have a home of their own and a permanent residential address. But it is not possible for everyone to have that much amount of money to invest in properties that they desire. So to facilitate these people, there are various financial institutions in USA who provides Home Loans to the residents of the country and the states.
The home loans can be availed against collateral commonly known as mortgages which are the security for the banks in the event of default from the side of the loan taker.
The person who is approaching a financial institution be it public or private, the first thing that is done by the institute is checking that either the person is matching their eligibility criteria or not and then the further procedure is followed if the criteria is matched. For the salaried applicant, the monthly salary of his or her is analysed and accordingly around forty to fifty percentage of it is charged as the instalment for the loan amount. So if the applicant’s salary is equal or above the mentioned amount that is required for charging the EMIs then the bank or other institution process the loan application further. For this purpose, the basic salary and the DA are being calculated and then the 40-50% bar is applied to check the EMI.