Enhancing Your Home Loan Eligibility
Posted by Robbin K on September 3rd, 2016
If you are planning to buy a home on a loan, by following a few simple steps, you can enhance your home loan eligibility…
Your loan eligibility determines whether your loan application will be approved or not and if approved, the amount of loan that is likely to be sanctioned. It is based on a comprehensive assessment of your credit worthiness, which depends on your income and debt repayment ability. While a good credit history and a comfortable income level (relative to the amount of loan sought) are the primary determinants of your home loan eligibility, you can improve your loan eligibility in the following ways-
As income is a primary criterion, you could consider making a joint home loan application. Any other earning family member (including spouse, sibling or parent) can become a co-applicant for the loan. In this case, as the clubbed income level would be higher, the loan eligibility would also be higher.
Repaying other obligations:
Lenders also consider your existing borrowings before approving a loan. With access to a central database updated by all lenders, each lender can find out about your existing debt level. If your existing borrowings are high, it could affect your eligibility to avail further loans. Therefore, to enhance your eligibility, it is wise to reduce your other loan obligations before applying for a home loan.
Apply for a step-up loan:
Step-up loans take into account the likelihood of an increase in the borrower’s income over time. The loan eligibility in this case is calculated on the basis of the possibility of higher future earnings of the borrower.
Relationship with the lender:
If you enjoy a long-standing relationship with the lender and have a good credit history, you could negotiate for a lower interest rate and higher loan eligibility.
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About the AuthorRobbin K
Joined: June 28th, 2016
Articles Posted: 40
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