Do you plan to move to your new home soon? You can make it happen by getting a home loan. Many financial service providers are available and will give a home loan with flexible lending conditions and low-interest rates.
Many financial service providers will consider your credit score before approving your loan. Other lenders check your age, income, or repayment capacity before extending a housing loan to you.
You need a huge amount to buy a ready-built home or build a new one. So, you should work to improve your eligibility for a reasonable loan amount.
Tips to Increase Your Housing Loan Eligibility
Clear Other Existing Loans
How much money do you need? You should answer that question first before applying for a home loan. Once you know the amount you require, gauge the amount you qualify for using a home loan eligibility calculator.
Is the amount you want lower than you qualify? Then, consider repaying any existing loan before you apply for a home loan.
Many lenders check other loans you’re paying before approving your application. Having many running loans lowers your home loan eligibility.
Clearing your existing loans gives your lender confidence that you can repay timely.
Improve Your Credit Score Ratings
A credit score means a lot when applying for a home loan. If you have good to excellent credit scores, it shows your potential to repay your loan.
In addition, housing loan interest rates will be low if your credit score is excellent.
Begin repaying your running loans on time to raise your credit score. You should also seek to clear any credit score errors from relevant authorities.
Opt for a Joint Home Loan
Your home loan eligibility increases when you add a co-applicant to your application. When your co-applicant possesses a good credit score and income, you qualify for a higher loan amount.
You can add your family member or spouse as a co-loan applicant. A joint loan application reduces the risk of repayment failure, which gives your lender confidence to approve your loan.
Disclose Other Additional Income Sources
You should indicate other sources of income when applying for a home loan. If you have a business or rental income, they will help to prove your ability to repay your loan.
You will qualify for a higher loan if you include other income sources during the loan application.
Choose a Home Loan with a Longer Tenure
Many lenders will give you a home loan with a 20 or 30 years repayment period. A loan with a maximum repayment period comes with a small equated monthly installment.
You can repay your loan without pressure when EMIs are smaller, increasing your eligibility.
Pay More as a Down Payment
You will not get 100% financing to buy or build a home. Many financial service providers will pay about 75% to 90% of your home value. Then, you will be expected to finance the balance.
The housing loan interest rate will be lower when you make a substantial down payment and get more cash.
Avoid Changing Your Job
Are you a salaried Person? Many lenders expect you have worked for the last two or three years. You shouldn’t change your job if you plan to apply for a home loan soon.
Changing your job frequently may discourage your lender from approving your loan.
Build a Strong Relationship with Your Lender
You can create trust with the financial institution where you want to borrow a home loan. Make sure you open an account with your lender. If you’re employed, you can choose to have your salary pass through where you want to apply for a home loan.
Building quality trust with your lender increases the chances of loan approval.
Limit Fixed Obligation to Income Ratio at 40%
You need money to finance your living expenses. Many lenders will look at your fixed obligations to income ratio before approving your loan. Your loan approval chances will be low if your FOIR exceeds 40%.
You should keep your fixed obligation to income ratio to qualify for a good amount of home loan.
Search and Settle on the Right Lender
Getting a home loan from housing finance companies will be ideal if you’re new to credit. Housing finance corporations’ lending conditions are flexible. You are sure to get a home loan with affordable interest rates.
The housing finance companies have in-house models to determine your loan repayment and creditworthiness.
Take the above steps, and you will increase your home loan eligibility. Building or buying already built property require huge amounts. So, implement these measures to ensure you get the huge amount you need.