Are you looking to apply for a home loan to buy your new home or construct one? If yes, then congratulations!
You are one of the lucky ones to be able to fulfil your long-craved dream of having your own home.
But, before you apply for housing finance, you will need to meet some home loan eligibility criteria. If not, your loan application may not be approved.
Let’s check out some leading aspects that can enhance your home loan eligibility in this post!
1. Having a credit score of 750 and more
Even though the home loan is secured, you need to convince your lender that you have the required creditworthiness for the loan. It is because a home loan is a big-ticket finance. And lenders want to be sure before sanctioning the same. A credit score of 750 or more indicates that you have paid your loan EMIs and other debts on time. If your cibil score is not 750+, then you can improve that by repaying your debts on time.
2. Clear repayment history
Having a clean repayment history is another home loan eligibility criteria that can help you get the loan approval fast. If you have been repaying your existing loan EMIs, credit card outstanding and more on time, then you will have a clean repayment record.
3. Regular source of income
If you are well employed, then your home loan eligibility will improve drastically. It means that you will be able to make timely EMI payments.
4. No job hopping
When you are applying for the home loan, the last thing that you can do is switching your jobs frequently. Lenders want someone with a consistent employment history to sanction the loan application. If you continue hopping jobs now and then for some hikes, then the lender may not see this as a good practice and reject your application.
5. No loans, credit card and other dues
The fewer liabilities and obligations you have, the higher will be your home loan eligibility. Thus, before you apply for a home loan, make sure your entire debts are paid. It will help you get a considerable loan amount at a competitive rate.
6. Your age
The younger you are, the better will be your chance to get the approval for a higher amount with a longer tenure. It is because you have more workable years left and you can repay the loan EMIs on time. On the other hand, if you are about to retire, then you may get the loan approval but with a smaller tenure and a bit higher interest rate. Also, the loan amount may not be that higher.
7. Less debt to income ratio
The less debt to income ratio means that a less portion of your income is being consumed by your debt. The lower it is, the higher will be your home loan eligibility. The higher it is, the lower will be the home loan eligibility. A debt to income ratio of 40% is what is considered ideal when it comes to the approval of the home loan request.
8. Apply for a joint home loan
If your spouse is working and has a higher cibil score, then you should apply for the housing loan with your spouse. It will help you boost your home loan eligibility big time. You will also be able to get a bigger loan amount with a longer tenure.
9. Check out the home loan eligibility criteria on your lender’s website
Other than the discussed home loan eligibility factors that can boost it, you should also check out the home loan eligibility criteria on your lender’s website. Once gone through, you can ensure meeting all conditions and getting the loan approval. You can also use the home loan eligibility calculator to know the amount that will be sanctioned.
You are now aware of the elements that can help you improve your home loan eligibility. It will help you become loan eligible and get closer to your new home.