There are eligibility requirements that must be met when applying for a Home Loan. Common considerations include current debts, credit score, and income level. It makes sense to meet these requirements to increase your chances of getting your loan approved. In this article, let’s explore a few tips to increase your house loan eligibility and come one step closer to your dream of home ownership.
Ways to Boost Home Loan Eligibility
The following methods will help you increase your chances of getting a Home Loan:
- Present a High Credit Score
A good credit score of 750 or more demonstrates that you have been a responsible borrower and are regarded as a low-risk borrower. Conversely, if your credit score is low, try to improve it by paying bills and other EMIs on time. Your credit score plays a big role in increasing your Home Loan eligibility.
- Make a Bigger Down Payment
When you are looking to secure a Home Loan, lenders generally cover around 80% – 90% of the property’s worth and the rest you need to pay as a down-payment. If you can increase your down payment amount when getting a loan, it minimises the lender’s risk factor and you become a more favourable candidate. For example- if the property price is Rs. 50 Lakh and you decide to put down Rs. 15 Lakh as your down payment, it can enhance your chances of securing a Home Loan successfully. A larger initial down payment reduces Home Loan EMI calculation and provides you with better control over your finances.
- Opt for a Longer Loan Tenure
The duration of your loan directly influences your EMI amount. A longer tenure leads to lower monthly payments and makes it easier for you to manage repayment. Make sure to plan thoughtfully to find the right mix of affordability and overall expenses.
- Make Sure to Settle Existing Debts
If you have any type of unsettled loans or Credit Card loans and still considering taking out a Home Loan, it would be helpful to settle those existing debts first. Financial institutions always take these things into account as they represent the portion of your income allocated towards fixed obligations such as loan EMIs.
- Declare All Additional Income Sources
Your primary earnings may not provide a clear picture of your financial strength and stability. To enhance your loan credibility, consider revealing streams of income like a part-time job, rental income, etc.
- Add a Co-Applicant
Adding another applicant who has a stable income and a strong credit history can greatly enhance your chances of qualifying for a Home Loan. The lender reviews the income and repayment ability of both applicants which makes it simpler to meet the criteria for a higher loan sum. Potential co-applicants could be your spouse or close family members like parents or siblings to boost your standing based on both your incomes.
- Pick a Lender with Flexible Policies
Lenders have various ways of assessing applications for Home Loans. Be sure to look into a lender that is known for having a customer-friendly approach. Lenders like ICICI Bank offer minimal documentation and instant provisional sanctions for home loans. And you can easily apply for a loan online.
- Improve Your Job Stability
Most lenders favour applicants who have a good employment background since it indicates stability. If you have recently switched jobs and are considering applying for a Home Loan soon then it’s generally advisable to hold off for a few months. Most financial institutions prefer applicants with a work history of 2 to 3 years. Additionally, they often request that you have been in your position for at least 6 months to 1 year before applying for a loan.
Conclusion
Boosting your eligibility for a Home Loan doesn’t need to be a tough task. Simply focus on keeping your credit score intact and providing a decent down payment while also cutting down your existing debts. Additionally, consider teaming up with a co-applicant and opting for shorter repayment periods as smart tactics to improve your likelihood of securing approval for Home Loans with leading lenders like ICICI Bank.