Are You Eligible for Housing Loan?

Bangalore : For most of the individuals, owning a home is a significant investment. Thus, to make it possible a lot of home buyers will incline towards housing loan. Saying that, obtaining a housing loan is much simpler than done.  Housing loan is a good credit facility where interest rates are less and term is longer. Also, it offers tax benefits to home seeker. To apply for a loan, whether it is housing loan or personal loan, the foremost thing all should consider is the borrowers’ ability to repay the money. Even though, there are numerous parameters and criteria have to be contented by each applicant, in that the most imperative one is home loan eligibility.

For most of the applicants, the decision of purchasing depends upon housing loan amount. The following are the various factors that decide your housing loan eligibility.

Information Provided:

The information filed by the applicant in the application form should be genuine because at the beginning, the banks will verify the information provided by the applicants from various sources. In case the applicant filed the wrong information, the housing loan application will be rejected.

Stability of Income:

This is a significant determinant as Banks ponder that the applicant who earns income through salary (it means a steady job holder) would have a repayment capacity than self employed person. This is because they are looking out for stability in income. If the applicant has temporary job or the job is at risk, the chance of getting the larger housing loan is too low.  Applicants who have assets and larger savings are eligible for getting larger amount on housing loan. The financial position of the applicant, net income, liabilities, assets and many others will decide the loan amount.

Credit History:

Before endorsing the housing loan, banks confirm the previous financial repayment history, sometimes they will also check out the financial records of family members. If the applicant has defaulted, then his credit score will be poor. The applicants with low credit score can find difficulties to obtain a housing loan. Applicants credit score and saving habits play a major role in this aspect. If you have more amounts overdue then the credit score will descend. It is advised to clear the debts with the moneylenders.

Personal Profile:

Banks decisions are leveraged on various factors like personal profile, educational qualification, professional experience, assets owned, number of dependents, existing liabilities, saving accounts and many others. As it is a long tenure commitment, banks will analyze your ability power and potential growth in your career.

Age:

Banks try to limit the term of the housing loan to an applicant’s retirement age. Suppose, if the applicant age is 30 years and is set to retire at 60 years, then the tenure that bank can offer maximum 25-30 years. The applicant who is close to the retirement may find challenges as the regular income will be stopped. Moreover, Banks won’t prefer applicants who are less than 21 years of age.

Quality of the property:

Before sanctioning the housing loan amount the banks will conduct a legal and technical review of the house/apartment to check whether the ownership title is legally clear, if there is any objection the loan application will not be accepted.  In case of an existing property, due to the specific norms, banks will consider the age of the house/property.

How to enhance housing loan eligibility?

The simplest way to enhance the loan eligibility is to join the income of your family members like spouse, mother, father, son and daughter. If a husband and wife both are working, then their combined income will strengthens the loan eligibility by making twofold amount.

Clearing other debts before attaining a housing loan will keep a large chunk of amount to repay the loan amount with in time. Moreover, clearing the debts will also help you to achieve a greater housing loan amount.