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  • Tips to Increase Home Loan Eligibility

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  • Banks carry out a comprehensive process to determine the eligibility of an applicant for a home loan. The maximum eligible amount and interest rates are also determined by the bank/lender based on the applicant’s profile which includes income, employment type, credit score, etc. The eligibility for a home loan can be increased by following the below-given tips:

    6 Best Ways to Increase Home Loan Eligibility Quickly

    1. Add a co-applicant
    2. Maintain a credit score above 750
    3. Repay your debts religiously
    4. Open an account with your preferred lender
    5. Declare your additional income sources
    6. Choose a longer tenure
    Tips to Increase Home Loan Eligibility

    1. Add a co-applicant

    You can enhance the eligibility for a home loan by adding an earning family member with a good credit score, as a co-applicant. Doing so will also enhance the maximum amount that you can borrow because your EMI affordability will increase. While evaluating the eligibility for a home loan, some lenders may club the income of family members.

    2. Maintain a credit score above 750

    A higher credit score (preferably around 800) can boost your home loan eligibility since a high credit score indicates your high repayment capacity. Having a high credit score can also fetch you a lower interest rate from the lender. You should also check your credit score regularly so that you can take corrective steps to enhance your score if it is low to avoid any loan rejections.

    3. Repay your debts religiously

    Paying your debts sincerely can help build a good credit score which, in turn, will enhance your home loan eligibility. Additionally, you should also have savings and investments which may also increase your home loan eligibility.

    4. Open an account with your preferred lender

    If, after exploring various lenders and comparing the benefits offered by them you have decided on a lender, it is a good idea to open an account with them. This should be done at least one year before applying for a home loan as you will have enough time to build a relationship with the lender. A good relationship with the lender will increase your eligibility for a home loan.

    5. Declare your additional income sources

    Your eligibility for a home loan can be enhanced if you declare any extra sources of income as it indicates your higher repayment capacity.

    6. Choose a longer tenure

    Choosing a longer repayment tenure can increase your home loan eligibility as the EMI amount will be lower which means that you are more likely to make timely payments. To the lender, it will appear as a lower risk lending to you and in the process, your eligibility for the home loan gets enhanced. However, on the flip side, it may lead to you paying a higher interest over the loan tenure.

    Find: Home Loan EMI Calculator

    Additional Tips on Factors Affecting Home Loan Eligibility

    • Income – This is perhaps, one of the most important factors that banks consider while determining your eligibility for a home loan. Your eligibility for a home loan is higher if your income is on the higher side simply because your repayment capacity is higher. Your maximum loan amount will also be enhanced if your earnings is high.
    • Age – Age is also another factor that affects your home loan eligibility significantly and also helps the lender to determine the term of the loan. The younger you are, the higher will be your eligibility for a home loan.
    • Credit Score – Lenders will look at your credit score to determine your home loan eligibility and 750 is the minimum score that you should have.
    • Debt Obligation - If your debt obligation is high, your eligibility for a home loan may be lower simply because lenders will assume that you may not be able to pay the EMIs for the home loan.
    • Occupation - Your occupation is a vital determinant of your eligibility for a home loan. If you are a salaried individual, your eligibility will be higher since you have a stable source of income. Professionals such as doctors, architects, etc., and self-employed individuals such as businessmen are also eligible for a home loan.

    Get Prequalified by Checking Home Loan Eligibility

      

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