Nowadays, fulfilling your wish to own a dream home has become a lot easier. This is mainly because acquiring home loans have become convenient enough. Banks and financial institutions have stepped out of their rigidity in sanctioning home loans. This flexibility has enticed more people to apply for loans and acquire possession of their dream house. Also, this flexibility has affected the home loan eligibility factors, making the process of obtaining loans even more convenient.
Borrowers can improve their home loan eligibility by focusing on the below listed factors-
Maintain a good credit score
An essential factor in increasing your home loan eligibility is by maintaining a good credit score. A credit score is an element that lenders assess to determine whether you are a responsible borrower or not. Along with that, it also shows how successful a particular borrower is, in managing his/her loans. The least score to qualify for a home loan is 700. Although to increase your home loan eligibility, it is preferable to have a credit score ranging from 750 to 900.
Opt for a step-up loan
In the case of salaried individuals, they often face difficulties paying the massive instalment amount from the first. Therefore, in such cases, a step-up home loan is a smart choice to go for. In a step-up home loan, the EMI amount for the initial few years are low. This amount increases in the later years following the increasing income of the applicant.
Although the interest rate is much higher than normal home loans, the initial lower EMIs offer much feasibility for youngsters to boost their home loan eligibility.
Go for a longer tenor
Another important factor in improving your home loan eligibility is to go for a longer tenor of repayment. With increased repayment duration, EMIs are reduced. Therefore, it will save you from the burden of servicing a hefty amount every month. However, longer tenor will also result in paying a significant sum of interest amount at the end of the tenor.
Demonstrate all additional sources of income
If you have multiple sources of income, presenting each of them in front of the lender is preferable when you apply for home loan. It increases your earnings, but it also increases your chances of applying for a higher loan amount. Also, lenders become assured of your repaying capabilities, resulting in boosting your home loan eligibility further.
Apply with a co-applicant
If you face problems acquiring home loan because of your income, choose to apply with a co-guarantor instead. An earning sibling or spouse having a good credit score as your co-applicant will help increase the total earning on paper. This will result in you being eligible for higher loan amounts, as your EMI payment capacity will also increase accordingly.
Also, before you apply for home loan, there are some factors which you need to keep in mind. Home loan eligibility criteria top the list of those factors. Every financial institution lists different requirements, which is why one must check the criteria beforehand. If you do not qualify for a home loan from a particular lender, you can also seek a similar credit option from different.
You can also make use of an online home loan eligibility calculator before applying. This helps you in knowing the exact EMI amount, which you have to pay against a certain loan amount. Knowing the amount beforehand can eventually help you in arranging the necessary funds before applying for a home loan.
For simplifying and accelerating these loan application processes, financial institutions exhibit certain pre-approved offers. These offers are applicable on a variety of financial products like home loans, loan against properties etc. Provide a few essential details like your name and phone number to check your pre-approved offers today.