Factors that influence your Loan Against Property Tenure
Posted by Anurag Mishra on June 13th, 2017
Owning a new home can be the best feeling in the world! It gives you a sense of achievement on a personal level and the satisfaction of building a safe nest for your family. But after the initial bliss of buying a home wears off, one has to face the reality of paying monthly EMIs for the mortgage loan.
What if the EMI paying tenure is smooth and not dreadful? This is where certain important factors step in. It is essential that one pays extra heed to these factors while considering loan tenure for a loan against property. Following are the elements which one should consider before finalizing the loan tenure:
- The amount of your loan against property: Usually, lenders tend to offer borrowers a longer tenure to increase the eligibility of the loan. One should keep in mind that the EMI should not exceed 40% of the take home pay. Thus, for a longer tenure the EMI is lesser which facilitates the eligibility based on the EMI.
- Your EMI: As highlighted earlier, your EMI plays a vital role in deciding the tenure of your home loan. If you wish to have a low EMI, it will result in longer loan tenure. On the other side, if one is comfortable paying a higher EMI, one can choose a shorter tenure. A short tenure helps the borrower save a lot of money on the interest paid.
- The mortgage interest rates: The equation is simple. If the other elements like the mortgage loan amount and mortgage interest rates are constant, then the EMI fluctuates on the mortgage interest rates. i.e, the lower the mortgage loan interest rates, the lower the EMI. One can also ask his lender to increase the EMI in order to shorten the loan tenure.
- Your age: Your age plays a pivotal role in deciding your loan against property eligibility and making you the ideal borrower since a lender tends to take your age into consideration while lending you a loan. This is because; the lender wants to be sure that his loan is repaid before a person nears his retirement and doesn’t fit his loan against property eligibility. Thus, many lenders refuse to lend a home loan to older people unless they can prove they have a dependable & a sustainable source of income.
Thus, the above mentioned factors are the most important elements though not all, while deciding a home loan tenure for you. It is wise to take a loan with a shorter tenure if you can comfortably pay off a slightly higher EMI with your monthly spends.