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:
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.
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.
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.
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.
Your eligibility for a home loan can be enhanced if you declare any extra sources of income as it indicates your higher repayment capacity.
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
Get Prequalified by Checking Home Loan Eligibility
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