Getting a home is not at all a very difficult task in modern times, thanks to the number of banks who are now coming forward to provide the necessary financial assistance. If one has a more or less steady income source and has all the documents to show for it, then it is not too difficult to acquire a home loan. Banks today are now ready to finance about 80% of the home price and one just has to have the required amount of money to book the flat and make the down payment. The home loan often takes care of the rest in a most hassle free manner. However, to make sure that your home loan application is approved, you have to be sure that you are eligible for the home loan in the first place.
Here are some things to consider to increase your eligibility and make sure that your home loan application is approved:
What are the factors that can help with increased home loan eligibility?
While one is always eligible for a home loan in some measure, provided he has an income to show for it, there are often other ways of increasing the eligibility and that also helps you get more money sanctioned from the banks. However, it is very important that one goes about the repayment plan time and again so as to avoid any kind of hassles during repayment. In case you are unable to repay the loan, even after paying a considerable number of EMIs, the house may be forfeited and seized by the bank and the money spent on it would be lost.
The cities today boast of every amenity that can be imagined and the steady rise of the population is also leading to increased demand for housing. There are many major banks that offer home loans for buyers across various categories. One just needs to check his/her eligibility to be approved for the loan and the disbursal can take place within a couple of days or a week in most cases.
How would one check the eligibility for before applying for the loan?
One of the best ways to check the eligibility for a loan is to use an eligibility calculator that most banks have on their website. Certain factors are taken into account like the income of the applicant, the loan tenure, the interest rate, the expected principal amount of the loan and whether there are any additional sources of income to determine how much loan is the applicant eligible for.
Lenders also take into account certain other factors like credit score and stability of employment to make sure that the borrower is a safe bet to lend to and whether he would be able to afford the repayment of the loan. If these factors are in place, then the home loan eligibility is bound to increase.
How to increase the eligibility for home loan?
To start with, a good credit score is a marker that the borrower is good with his finances and there are no dues or unpaid credit card bills that can adversely affect his repayment and increase his liability. Once the basic eligibility factors are met with, certain document are also required to be submitted and only once they are verified and cleared, is the loan finally approved. Some of the documents that are required at this point of time are Photo ID and Age Proof, Address Proof and the IT returns for the last three consecutive years or the salary slips.
To be eligible for a home loan, it is very important that one is able to meet the monthly EMI requirements. A chunk of the monthly income will go towards the payment of EMIs for the span of fifteen years or so, depending on the tenure of the loan and it is important to determine at the very onset that you are well equipped to handle this kind of a financial commitment. The best way to find this out is through the use of an EMI calculator which will instantly show how much EMI a borrower has to pay each month, depending on the home loan interest rate that the lender is currently charging and the loan tenure for which he wishes to apply for the loan. If the income is more, then the eligibility will also increase accordingly.
Home loan eligibility can also increase if one is offering some kind of collateral. Home loans are usually secured by the property itself which is held as collateral by the bank. However, if you do not meet the eligibility criteria outright in terms of your income and assets or stability of employment, you may consider submitting some other collateral in the form of security like ancestral property, FD certificates, insurance investments and so on. This will help you increase your eligibility by a good deal and secure the home loan in question. However, the only risk here is that if the borrower fails to keep up with the EMIs, the security/collateral will be forfeited automatically.