If you have decided to buy a house and finalised your house, the next step is to pay the money. To buy a house, you must take a loan or sell any property. That’s why we keep some money for the down payment and take out a home loan for the remaining amount. However, lending banks and financial institutions grant home loans only after considering many factors. It takes into account a lot of factors, such as your income, expenses, and credit score. Should they be given a loan or not? If given, how much? And more. In this context, here are some tips to increase your home loan eligibility.
This is the most commonly used tip. If you apply for a home loan with a co-applicant, the chances of getting the loan will increase. If two people apply for a home loan together, both their incomes will be considered. With this, the chances of getting a loan are very high. However, this is only possible if the co-applicant has a good credit score. Also, his or her financial stability is very important.
The longer the tenure of a home loan, the lower your EMI. As a result, your income-to-expenditure ratio will decrease. This increases your chances of getting a loan. However, the thing to remember here is that the shorter the duration, the less you will pay. The longer the duration, the higher the amount paid.
If your lender offers you a step-up loan facility, consider opting for it. It involves small payments at first. It can be increased over the years. It is very useful for those who are at the beginning of their career and have a chance of getting a good salary increase.
Attach proof of your regular bonus and other income while applying for a home loan. Lenders take these into account and can lend you the maximum amount.
If you are planning to rent out your property, you need to explain how much rent it will fetch in the future. Lenders will also look at how much rent the property fetches. So that your loan repayment capacity is assessed and the loan is sanctioned accordingly.
Many developers have a long association with certain lenders or institutions. They would have approved the project. If you buy a flat in such projects, then the loan will be very easy. Then just your income proofs are enough.
The most important thing that banks or financial institutions look at while granting a loan is the borrower’s credit score. This approach is useful for assessing the borrower’s debt repayment status. A credit score is based on factors such as whether credit card payments are in arrears. Loans are easy for those with a good credit score. Moreover, depending on the credit score, interest concessions are also available. If you take a personal or consumer loan and make timely payments before applying for a home loan, your chances of getting a home loan will increase.
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