5 Ways To Rise Your Home Loan Eligibility

Sep 08, 2023 - by Flat In Kalyan


5 Ways To Rise Your Home Loan Eligibility
Raise the tenure
This is the most actual way to improve your home loan eligibility. On a longer tenure, the principal and the interest rate endure the same; only the net interest outgo rises. The increase in the tenure increases loan suitability because the burden of equal monthly instalments (EMI) declines and the ability to repay expands. For instance, if you plan to take a home loan for 10 years and realise at the time of the loan judgment that the monthly EMI is higher than you can pay, you could ask the loan officer to upsurge the tenure from 10 years to, say, 20 years. This will decrease the monthly burden.

Pre-pay running loans
It is sensible to pre-pay your previous loans before you apply for a new one. While scheming your suitability, banks take into account the EMIs you may already be paying.  For example, your monthly income is Rs 1 lakh. Your bank reflects only 50 per cent of the income to analyse your home loan eligibility, so it means Rs 50, 000 will be measured to arrive at your eligible loan amount. Now, if you have another loan running for which the EMI is Rs 10,000, the credit officer will further eliminate Rs 10,000 from the qualified amount of Rs 50,000. Now, if this monthly burden of Rs 10,000 was going to end in two months, you would not want it to affect your home loan suitability. You might pay Rs 20,000 to pre-pay your present loan and boost your home loan eligibility. Also, keep the foreclosure letter of your pre-paid loans handy at the time of smearing for the new loan.

Share your loan burden
Another way of improving your suitability is to include the income of the father/mother/spouse or son. But, pre-check your bank's guidelines on who could be a co-applicant, before smearing for the loan. Many banks do not prefer to give the loan to brothers and sisters as co-candidates.

For example, your monthly income is Rs 1 lakh and you apply for a home loan of Rs 50 lakh. Throughout the evaluation process of the loan, you realise that the monthly instalment is too high. You are married and your spouse is making a monthly income of Rs 50,000. You could comprise his or her monthly income and the basis of loan suitability would improve from Rs 1 lakh to Rs 1.5 lakh. That will decrease the monthly burden by raising the eligible amount.

An additional boost to eligibility
Banks mostly compute the loan eligibility on the fixed components of your salary. But you can present bonus workings and other incentives to improve your home loan suitability. However, banks have varying norms on taking into account the income which is not a steady feature of your overall salary. For instance, many banks take into explanation only 50 per cent of the bonus or 100 per cent of the repayments, if the fixed amount is being accredited. The lender will always need secondary documents as proof of this extra income. Similarly, the rental income can also be comprised to enhance the loan suitability.

Maintain a good credit score
Keeping your recognition score high is in your own hands. You can do so by gainful monthly instalments of your running loans on time and receiving this information updated on CIBIL. For example, if an aspirant has failed to repay 12 monthly instalments of a loan on a steady basis, banks do not accept his loan application as a average practice. It is advisable to clear previous loans before smearing for a new one.

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