Housing Loan Eligibility

Home, sweet home, built out of your dreams. A place where you return after a hard day’s work and relax, a place where you share precious moments with your family. A place that gives you a sense of belonging. Realizing your long cherished dream of owning your home through hassle free and customer friendly housing loans are available. You can apply for a Housing loan even before you select your property. The loan amount would be sanctioned or approved for you, based on your repayment capability. So Planning to buy that long cherished dream home??

Housing loans are provided based on the market value, mainly estimation given by banks or the registration value of the property. Availing various types of house loans to suit your individual needs at the lowest rates & easy financing can now fulfill the need for a house of your own.

Housing loan is not a one-time decision; do review the market periodically before availing them. Today there are unlimited numbers of banks in the country wanting to give out Home loans. Given this scenario, it may seem easy getting yourself a loan.

Banks determine your Housing Loan Eligibility based on your repayment capacity and discuss about the loan amount up front. The eligibility for acquiring a home loan is augmented by clubbing income of your father/spouse/mother/son, by clearing your outstanding debts, by stretching your loan tenure, Salaried individuals can increase their eligibility by showing their performance linked income or bonus earned.

Housing loan interest rates have inched up in the last few months. This in turn, has affected the loan eligibility for home loan borrowers Housing Loan eligibility is inversely related to rates. As interest rates rise, Housing Loan Eligibility becomes stiffer. In such a scenario, some home loan borrowers might have to re-evaluate their options.

There are five ways by which individuals can enhance their housing loan eligibility.

Increasing the loan tenure: One very elementary method of enhancing the home loan eligibility is by opting for a higher tenure. This is so because the EMI (Equated Monthly Installment) per lakh starts to decline as the tenure increases. Other factors like interest rate as well as the principal amount remain the same, despite the higher tenure. Since the individual is paying a lower EMI now, his ‘ability to pay’ and therefore his loan eligibility, automatically increase.

Repaying other outstanding loans: Individuals with outstanding loans like car loans or personal loans may face a problem with loan eligibility; industry standards suggest that existing loans with over 12 unpaid instalments are taken into account while computing the home loan borrower’s eligibility. In such a scenario, individuals have the option of prepaying in part/full their existing loan.

Clubbing of incomes: Another way of increasing loan eligibility is by way of clubbing incomes of spouse/father/mother/son. An illustration will help in understanding things better. the individual can club his spouse’s income along with his own income and then opt for a home loan. The eligibility in this case, will be calculated on the clubbed income of both husband and wife- thereby enhancing the individual’s eligibility to the extent of the spouse’s income.

Step-up loan: Individuals can also opt for step-up loans and enhance their loan eligibility. Simply put, a step-up loan, a loan where in an individual pays a lower EMI (Equated Monthly Instalment) during the initial years and the same is enhanced during the rest of the loan tenure. The initial lower EMI helps increase the individual’s ‘capacity to borrow’.

Perks: Salaried individuals must ensure that variable sources of income like performance-linked pay among others are taken into consideration while computing their income. This in turn will imply that the loan amounts they are eligible for, stand enhanced as well. However, individuals need to keep in mind that increasing the eligibility can have an impact on their financial planning.

Buyers tend to make mistakes while entering into deals, which may not be beneficial for them, so better compare all the variables before signing a loan agreement by different banks. However the loan agreement should be finalized only after reading the terms and conditions carefully.

You can apply for a Housing loans even before you select your property. The loan amount would be sanctioned or approved for you, based on your repayment capability.

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