For most people, affording a house is only possible with the help of a home loan. Since real estate prices are so expensive, it is usually not a possibility to solely rely on savings to make a property purchase. A home loan provides the financial strength to buy a house, and lenders usually offer a period of 20 years to repay the loan in monthly instalments.
However, before you apply for home loan, it is important to first be aware of the lender’s home loan eligibility criteria. Now, finding out about the eligibility criteria is quite simple, there is no need to even step out of the house! All that is required is for you to be aware of the following:
- Factors affecting home loan eligibility
There are various factors that lenders take into consideration while determining an applicant’s home loan eligibility. These include the applicant’s age, CIBIL record, and the FOIR (fixed obligations to income ratio). Lenders can also take into account factors such as an applicant’s monthly income, employment status, property details, as well as the LTV (loan-to-value ratio).
- Using a home loan eligibility calculator
A home loan eligibility calculator is the reason why there is no need of visiting a financial institution to find out about your eligibility for a home loan. This calculator is an online tool that will help in computing the loan amount that you are eligible to borrow. It substitutes the need to manually calculate one’s eligibility, which makes the process not just more efficient but also error-free. Using this calculator is simple. All that needs to be done is to fill up information in the calculator’s fields that require details of your loan tenure, monthly income, any additional sources of income, as well as monthly instalments of existing loans. The best part about this calculator is that anyone can make use of it for free. Most lenders have made this calculator available on their websites. Any individual can make use of it any number of times.
- Improving your home loan eligibility
Did you know that there are effective ways in which you can improve your home loan eligibility? One way is to make sure you maintain a credit score, which is above 750. You can do this by clearing all credit card bills and other payments on time without any defaults. Lenders prefer borrowers with good credit scores and even offer better loan plans to them that can include a higher loan amount at a lower home loan interest rate. Also, it is better to clear the monthly instalments of any existing loans. This will improve repayment capacity, which will in turn help in improving housing loan eligibility.
Now that you are aware of how to check the eligibility criteria for a home loan, make sure to do so before speaking to a lender. However, do note that the criteria could differ as per the financial institution’s terms, so be sure to check with the lender before applying for the loan.