Getting your first home is dream for every one of us. We, people of Nepal, buy house or land for two purpose; one is to fulfill basic need of shelter and another one is safe means of investment. We think that the money invested in real estate does not deteriorate in long run and till date it has been proved also. For the citizens of country like Nepal where per capita income is too low, one cannot afford to buy home or land in one shot. So, the alternative is to take home loan.
Home loan in Nepal, also known as Loan against mortgaged property(LAMP) is a type of loan i.e. given to general public in order to buy land, house and to renovate or construct building. Bank and financial institution look into two main parameters for home loan in Nepal.
- Loan to value ratio (LTV): Loan to value ratio is the ratio of loan amount to the fair market value (FMV) of your real estate property. FMV is derived by engineer consultancy also termed as valuator in Nepal. Engineer, derive FMV by taking into consideration latest market rate and government rate of that real estate property. Commonly 70% weightage is given to market rate and 30% given to government rate. For home loan in Nepal the LTV ratio should not exceed 50% outside Kathmandu Valley and 40% inside Kathmandu valley. For example, the loan amount you are looking for is 20 Lakhs and the valuation of your property comes to 50 lakhs, then the LTV ratio will be 40%. It means you are eligible to get home loan in Nepal both inside and outside valley.
- Debt to burden ratio (DBR): Debt to burden ratio is the ratio of the equal monthly installment (EMI) to valid income. EMI is calculated on the basis of loan amount, interest rate and the tenor of your loan. You can easily calculate it using EMI calculator. Valid income can be any i.e. through your salary, business income justified from audit report, rent income, income from agriculture, remittance, income from vehicle etc. All the sources of income should be justified from legal documents. The DBR ratio should not exceed 50% to be eligible for home loan in Nepal. For example the EMI for your loans is 25 thousands and your income is 60 thousand, then the DBR ratio will be 41.66%. It means you are eligible to get home loan in Nepal
To be eligible for home loan in Nepal you should be eligible from both the parameters mentioned above. You can contact us if you have any queries.
Also, you can visit our website www.civilsathi.com.np to find suppliers, labor, engineer if you are about to construct your dream home all over Nepal.