If you are looking to avail of a home loan, the key to getting the best offer is to meet the lenders’ eligibility requirements. Read on to know how you can enhance your eligibility.
If you have been long dreaming of buying a house but could not save up enough to fund the purchase, applying for a home loan could be your best bet. A home loan helps you get the desired funds and gives you the flexibility to repay the borrowed amount in smaller instalments known as the EMIs (Equated Monthly Instalments).
But, to get the funds, you must meet the lender’s eligibility requirements. So, before you start the home loan application process and zero-down on the lender, it is advisable to take your time and do your research about the different lenders. Knowing the home loan eligibility criteria beforehand will help you choose the right lender and get the loan sanctioned without any hassles.
Below are a few tips to help you increase your eligibility and get the best home loan offer:
- Consider applying for a joint home loan
One of the most definitive ways to increase your home loan eligibility is to apply for a joint home loan with any of your family members who have a steady income. This could be your spouse, parents, or siblings. A significant advantage of applying for a joint loan is that the lender will consider all the applicants’ income to determine the eligibility, and you can apply for a higher amount.
- Repay your dues
One of the most important things that the lenders consider while approving the home loan is the borrower’s repayment capacity. If you have any outstanding loan like a personal loan or credit card dues, the lender may question your ability to repay the home loan on time. So, before you apply for a home loan, it is advisable to repay the previous dues completely so that you can set aside a fixed portion of your income every month towards home loan repayment.
Also, repaying the dues enhances your credit score, and you have better chances of getting the loan at an affordable interest rate.
- Put your additional income sources to good use
Apart from the salary you draw and the business income, if you have any additional income sources like a bonus, rent, dividend from investments, etc., you can inform the lender about the same to showcase your high repayment capacity. This will give the lenders the confidence that you will repay the amount without default.
- Increase the loan tenure
Another effective way to increase your home loan eligibility is to opt for a longer duration loan. Remember, the loan tenure has a direct impact on the EMI. Higher the loan period, lower the EMI, making it easier for you to repay the amount without default. So, when you increase the tenure, you indirectly increase your eligibility.
- Maintain a good credit score
The credit score is an important factor that the lenders consider for determining your home loan eligibility. For lenders, the credit score reflects your loan repayment capacity. Generally, most lenders consider a credit score of 700 as a benchmark score. So, if your credit score is 700 or more, you have higher chances of getting the loan sanctioned.
You can also use your high credit score to your advantage and negotiate with the lender to get a discount on the home loan interest rate.