Today most of us opt for a home loan to buy our dream house. But the first and foremost thing is that you must fulfill all the home loan eligibility so that your home loan application gets approved by the bank. Some important home loan eligibility criteria are- your net take-home salary, age, credit score, property location, credit history, repaying ability. etc.
Here are some important tips to enhance your home loan eligibility-
- Improve your credit score– The credit score is one of the most important factors which can improve your home loan eligibility. A good credit score suggests that you have a good record of managing your finances. Also, a high credit score helps to secure a home loan against a lower interest rate, which is really amazing! A credit score of 750 or above is considered really good which can improve your home loan eligibility.
- Go for a joint home loan– If you have a low credit score or low salary, then you can definitely avail for a joint home loan. If the co-applicant has a steady income with good credit score and repaying capacity, then it will enhance your home loan eligibility. Also, you can avail a lower interest rate on a home loan if you go for joint home loan. Moreover, many lending institutions provide lower home loan interest to the women co-applicant or first loan holder.
- Higher amount of down payment– Instead of paying only the minimum down payment amount of 10 to 25%, just pay higher down payment. This will lower the LTV ratio and will improve your home loan eligibility.
- Pay your existing liability– If there is any pending loan EMI or credit card bills payments, then don’t wait and payoff. This will increase your credit score which will improve your home loan eligibility.
- Longer home loan tenure– You should go for home loan with longer repayment tenure. This will lower down the EMI payment every month. Shorter home loan tenure will increase the EMI payment which can be really tough for you to pay. So, improve your home loan eligibility with longer repayment tenure.
- Step-up Loans– It is best for those who are having a lower monthly income and is finding difficult to pay the EMI. Under the Step-Up loan, you will be charged lower EMIs in the initial years and increase the amount gradually in the later years.
- Do not hurry to apply for home loan– You need to get your credit score from CIBIL and check it thoroughly. In case of any discrepancies, do report to the bureau and obtain a clean credit report. This will improve your home loan eligibility.
- Limit your FOIR up to 50%- FOIR is the portion of your income which is used for repayment purpose. Try to limit it to 40-50% which will improve your home loan eligibility.
