Read These 4 Tips to Know How You Can Enhance Your Eligibility for a Home Loan
A home loan is very helpful in providing financial cover to buy a house. It covers up to 80-90% of the property cost, depending on the loan amount. This takes care of the much-required funds for the purchase. However, do keep in mind that the loan amount would depend on your home loan eligibility criteria. Not every borrower would receive the same amount, and this is why it is important to be aware of the amount that you can qualify for.
Lenders take into consideration several factors while determining the loan eligibility of an applicant. By knowing these factors, you can improve your chances of getting a higher loan amount.
So, let’s take a look at 4 effective tips that can be used to improve your housing loan eligibility:
- Try and make a higher down payment
A home loan will only be covering up to 80-90% of the cost of a property. The remaining amount needs to be covered by the borrower’s personal funds. Now, some borrowers prefer to keep the down payment to the lowest and get the maximum coverage from their housing loans. However, if you are looking to improve your home loan eligibility, try to make a higher down payment as this will reduce the loan amount, thereby reducing the lender’s risk.
- Choose a long repayment tenure
You can either choose a short or long repayment tenure to repay the loan. Choosing a short tenure will help in clearing the loan faster as well as save on the interest payments. However, if you are to improve your home loan eligibility, it is better to opt for a long repayment tenure. This is because a longer tenure lowers the home loan EMI payments, reducing your risk of defaulting.
- Apply for a home loan with a co-applicant
A financial institution will only approve a loan application when they are sure of the applicant being able to repay the loan without any financial complications. Of course, you can get a home loan being the sole borrower. However, being a co-borrower and having two active incomes to clear the loan will always help in improving the chances of getting a home loan approval. Therefore, it is better to apply for a home loan with a co-applicant.
- Make sure to have a decent credit score
Any financial institution will always evaluate an applicant’s credit score before approving a home loan. Lenders prefer borrowers who have good CIBIL records, as this is an indication of a good repayment history. Ideally, one should aim to maintain a credit score of 750 or more, as this will help in giving a boost to their eligibility for a housing loan.
These tips can help in qualifying for a higher loan amount. Do note that it is advisable to make use of a home loan eligibility calculator. This calculator can help in displaying the loan amount you can get based on current eligibility criteria.