With home loan interest rates being at their lowest point in years, it is no surprise to see many people take advantage of the situation and apply for home loan plans. With the help of this loan, a borrower gets the funding for about 80-90% of the property cost. Lenders also offer flexible repayment tenures of up to 20 years. This means that you can make home loan EMI payments easily without having to spend a large chunk of savings at one time.
Now, before talking to a lender about this loan, it is necessary to be aware of the lender’s home loan eligibility criteria. Most lenders’ criteria for home loans majorly depend on their borrowers’ profiles. So, if you are looking to get a home loan, here are 5 effective pointers that can positively influence your housing loan eligibility:
- Go for a longer repayment tenure
Opting for a long repayment tenure means that the monthly instalments of the loan will be in smaller amounts. Since this is easier to pay off for a borrower rather than paying high EMIs, most borrowers choose to go for longer repayment tenures. Given their repayment capacity increases by opting for a long tenure, lenders are more comfortable in approving the loan application.
- Keep a good credit score
Before you apply for home loan, it is important to ensure that you have a good credit score. This is because every lender checks its applicants’ CIBIL records before approving loan applications. Lenders prefer borrowers that have a credit score of 750+. In addition, lenders often offer incentives to borrowers with good credit scores such as a low home loan interest rate and a bigger loan amount.
- Apply for a joint loan
Instead of one borrower repaying the loan, it is natural for the lender to prefer two borrowers earning active incomes and repaying the loan. This is because in this case, the risk of lending becomes lesser for the lender. Hence, if you are applying for a joint loan with a co-borrower who also has a good credit score as well as an active and stable income, your home loan eligibility is bound to get a boost.
- Try and make a higher down payment
A lender can finance a certain part of the property cost, and the remaining cost will have to be paid by you, which is known as the down payment. Now, if you are ready to make a higher down payment, the lender will have to sanction a lower loan amount, which proves to be a lesser risk for them. This can improve your home loan eligibility.
Now that you are aware of the factors influencing your home loan eligibility, the next thing to worry about is affording the home loan’s monthly instalments. For this, it is considered best to make use of a home loan EMI calculator, which will give an accurate estimate of the monthly instalments to be paid.