Banks and financial institutions carry out a plethora of checks to ensure you are eligible for home loans. During the evaluation of your home loan application, they look into several factors such as your remaining working age, your current age, your income, other existing loans, characteristics of the property, and so on.
Failure to meet some of the above can lead to the home loan application being rejected. However, there are a few tips that can help you to increase your home loan eligibility. Here are the top five tips.
- Add a Co-Applicant:
Some loan applicants might have a low credit score, insufficient income, other EMI obligations and so on. In such cases, the chances of your home loan application being rejected are high. Or you might get approved for a smaller amount. Adding a member of the family as a co-applicant in such cases can be a good idea.
A family member who has a good credit score and steady income can be a good addition to the home loan application. Adding a co-applicant can boost your eligibility for a bigger loan. Also, a lot of lenders offer slightly lower interest rates for female applicants.
- Credit Score Reviews:
It is a good idea to check your credit score before applying for a home loan, as it is one of the primary factors that lenders consider. Credit scores exceeding 750 are considered to be good and can fetch you low interest and better eligibility for the loan. If your credit score is low, you can take corrective measures rather than blindly approaching the lenders.
- Longer Repayment Tenure:
As a loan applicant, you can change the loan repayment tenure and along with it, your EMIs. Should you opt for a longer repayment tenure, your EMIs will reduce, thereby increasing your home loan eligibility. However, there is a small catch. If you opt for the longest tenure, you will end up paying more interest to the bank and thereby increasing your loan cost.
You can use online EMI calculators to decide on a tenure that gives you better eligibility without you taking a hit with a higher loan cost.
- Preferential Conditions:
Having an account or relationship with an existing lender can also lead to higher home loan eligibility. During your research, if you come across a lender with suitable benefits, you can open an account with them. A long term association with a lender gives them the confidence to offer higher loan eligibility.
- Higher Down Payment:
Another smart way to increase your home loan eligibility is to go for a higher down payment. As per RBI guidelines, lenders can finance between 75%-90% of the property value. And you must pay the remaining amount. When you opt for a higher down payment, the risk on the lender reduces considerably and that increases your chances of loan application approval.
The above are some ways by which you can boost your home loan eligibility.
