With the increase of home loan interest rates, many borrowers find it difficult to get home loans. This interest rate also affects the eligibility of home loan borrowers. This is because; the eligibility of the borrower is inversely proportional to the rate of interest. It shows how difficult to get a home loan from any bank, and it is clear that getting a home loan is a complicated process. There are a lot of factors involved with the home loan approval process, which one has to understand before applying for it. To get your home loan, you need to understand certain tips to increase your home loan eligibility. Here we will discuss the same in detail.
Try Increasing your Tenure
The easiest way to increase your home loan’s eligibility is to take a loan showing a maximum tenure as much as possible. This is because the borrower needs to pay less equated monthly instalment (EMI) to the lender if the home loan tenure rises to a maximum. Also, this tenure rate doesn’t affect other factors such as principal amount and rate of interest. Even if the tenure increases, the principal amount and interest stay the same. But the net interest amount changes with the increase of tenure rate. This creates a situation for the borrower to pay a less amount of EMI. This, in turn, automatically increases the home loan eligibility of the borrower.
Nowadays, many banks offer home loans to their customers which they need to pay within the maximum period of 20 years. Apart from this tenure rate, you need to focus on the interest rate too. Ensure that you made a deep study on different banks, and how they offer home loans and based on what eligibility criteria they offer you, etc. You can make use of an online tool, home loan eligibility calculator that gives a clear view about the loan amount you can get from a bank. Before you want to apply for a home loan, you need to understand how much amount you are eligible to get from a bank. This calculator gives you the result based on your income and other factors. So, you can check home loan eligibility using this online tool before applying for a home loan.
Pay your other outstanding loans
You may already lend some loans like a car or personal loans from the lender. Now, to increase your home loan eligibility, you need to clear such outstanding loans. The mortgage industry considers all your loans and the number of instalments that you require to pay them all. These factors decide your eligibility for a home loan. Your application remains unaffected until you pay some part of your outstanding loans. For instance, if you have 18 EMI’s for a personal loan, you can pay at least 6 EMI’s or the full EMI’s to increase your eligibility for a home loan. Lenders or banks follow different standards to compute your eligibility criteria for getting a home loan. So, you need to analyze this first to pay your unpaid EMI’s to manage your eligibility for home loan.
Pool the Family’s Incomes
One more way to increase your eligibility for getting a home loan is joining or pooling your family’s income together, such as father’s income, mother’s income, and children’s incomes as well. For example, if you need a home loan of $2,000,000 but, your income allows you to get only $1,000,000, then you can add your family members’ incomes too. Sometimes, your spouse may also earn some good annual income which you can pool it along with yours to apply for a home loan. This will help you to get the home loan approval.
If your family is economically weaker, then you avail the home loan subsidy. This will help you to get home loans with good concessions on interest rates, as it is a government scheme. But again, this scheme follows home loan subsidy eligibility criteria for people to avail of a home loan. Mostly for applicants who are economically weaker or falling under lower or, medium-income groups can apply for this subsidy loan.
Include all Sources of Income
When you are calculating your income, you need to include all sources of income such as perks, incentives, etc. that you get based on your performance. This way will also help you to increase the loan amount that you are applying for. Before applying for a home loan, you need to examine your financial standing. This will help you to arrive with the best suitable loan amount to apply for. You can consult a home loan specialist to get some ideas about home loans. You can also make use of a home loan eligibility calculator to understand the loan amount you are eligible for.