Apply home loan online : Majority of home buyers require home loan to bring their dream of owning a home closer to reality. during this process, the primary hurdle towards approval of application is to satisfy various home loan eligibility criterion like age, income, credit score, location of property, repayment capacity etc. Adopting below mentioned tips would assist in enhancing your home loan eligibility:
Pay higher deposit
As per RBI guidelines, home loan lenders can finance up to 75-90% of the property’s value (as LTV ratio). The borrower may need to contribute a minimum of 10-25% as deposit . However, rather than arranging just the bare minimum deposit , it’s wiser to supply a better contribution from your own pocket. the upper you contribute as deposit , the lower your LTV ratio would be, which successively enhances your loan eligibility and boosts the probabilities of authorization . Consider investing in mutual funds through SIP route, for accumulating higher deposit corpus. Apply home loan online
Opt for joint home loan
Insufficient income, low credit score, higher debt to income ratio etc. are a number of the common reasons behind rejection of home loan applications. In such scenarios, borrowers got to enhance their loan eligibility so as to urge their next application approved. choosing a joint home loan can help boost authorization chances if the co-applicant features a stable income, strong credit score and satisfactory repayment capacity. Moreover, adding a co-applicant can even assist in availing higher loan amount. Also, when woman are co-applicants or the primary loan holders, home loan is typically offered at lower interest rates by a majority of lenders.
Choose a extended loan tenure for higher eligibility
Apply home loan online : Borrowers often tend to choose shorter tenure so as to quickly complete their loan repayment and not stretch it over an extended period. However, shorter tenures imply higher EMIs, which can impact the repayment capacity of borrower and hamper their loan eligibility also . Instead, it’s prudent to choose a extended loan tenure. Higher the loan tenure, lower your EMIs would be, thereby ensuring the EMI are affordable consistent with borrower’s income.
Even if you’re financially capable to pay higher EMIs through shorter tenure, its wiser to choose longer tenure then either make part prepayments or foreclose the loan whenever you’ve got accumulated surplus funds. Although RBI has mandated banks to not charge prepayment charges for floating rate home loans, fixed rate loans should attract prepayment charges. So before you create prepayment, confirm the prepayment charges, if any, don’t defeat the only purpose of prepayment, that’s overall saving on interest cost.
Reduce your fixed income to obligation ratio (FOIR) to 40-50%
FOIR (Fixed Obligation to Income Ratio) is another vital parameter upon which the lenders evaluate customer’s application . It‘s the proportion of your income currently getting used for repayment of mandatory expenses like mastercard bills and loan EMIs. Since breaching the 40-50% mark is indicative of major proportion of your income going out for mandatory debt repayments, lenders usually consider the probabilities of default in future for such borrowers as high. Therefore, to avoid rejection on ground of high FOIR, limit your FOIR to up to 40%-50% to reinforce authorization chances. If it’s higher, consider paying off a number of your existing debts, preferably the most expensive ones like consumer loan or outstanding mastercard bills. Apply home loan online
Build a robust credit score
Apply home loan online : While evaluating your home loan application, lenders consider your credit score together of the key parameters to adjudge your credit worthiness. a robust credit score certainly enhances authorization chances, since it signifies disciplined handling of finances. Moreover, aside from increasing your loan eligibility, a robust credit score also enables the buyer to avail lower rate of interest from the concerned lender. If you’re new credit or have a coffee credit score, consider adopting regular and disciplined usage of credit cards to gradually build a robust credit score, and only then apply for a home loan . Additionally, just in case you’re choosing a joint home loan , remember that lenders check the credit score of co-applicant also , aside from that of the first borrower.
How to determine whether you’re eligible for home loan?
Borrowers often tend to bombard various lenders with multiple home loan applications, within the hope of getting one approved. Instead, borrowers must consider utilizing the web loan eligibility calculator tool, to see their loan eligibility with the concerned lender, before applying. Such calculator assists find out whether you’re eligible for the house loan or not, consistent with factors like your age, income, loan amount, tenure etc.
Moreover, as multiple home loan applications within a brief span of your time may damage your credit score, consider visiting online financial marketplaces to match and choose the foremost suitable lender. Apply home loan online