How to Maximize Your Eligibility for Home Loans

How to Maximize Your Eligibility for Home Loans

A home loan is a smart way to finance the home of your dreams. However, not everyone is eligible for a home loan. The bank carefully examines your financial situation to assess your eligibility and repayment capacity.

Factors typically taken into account include your income, employment history, credit score, and ability to repay. Based on this information, the bank can set an interest rate for the loan and the maximum amount you can borrow.

Your mortgage application may be delayed or even rejected if you do not meet the threshold set by the lender. Thus, checking your eligibility and improving it before applying for a home loan is essential. Here are some crucial strategies and tips to improve your home loan eligibility and increase your chances of getting a better interest rate.

1. Opt for an extended mortgage term

Extending the repayment period can lower your monthly EMIs and increase your chances of being approved for the home loan. However, lengthening the repayment period will also increase the total interest cost of the loan. Therefore, always use online home loan EMI Calculators offered by various banking institutions, including IDFC FIRST Bank.

Enter loan amount, interest rate and repayment term in IDFC FIRST Bank Personal Loan EMI Calculator. Once you have entered these entries, the calculator will show you the EMIs you need to pay. This way, you can choose the right repayment term based on the EMIs you can afford.

2. Put in a bigger down payment

Typically, banks finance up to 75-90% of the property’s value, leaving the borrower to finance the remaining cost through a down payment. The amount of your down payment affects the amount you borrow and the interest you pay. If you put down a lower down payment, you will have to borrow a higher loan value from the bank and pay a higher amount. home loan interest rate.

3. Get a joint home loan with a co-applicant

Having a co-applicant can increase your chances of getting approved for a loan, especially if you have insufficient income or a low credit score. Also, if your co-applicant has a stable income and a good credit rating, you can get approved for a higher loan amount. And if you add a co-applicant, some lenders can offer you competitive interest rates.

4. Compare mortgage offers from several lenders

Outraged home loan interest rate, you should also compare loan terms and conditions, repayment options, processing fees, prepayment charges, MCLR (Marginal Cost of Funds Based Lending Rate), etc.

Ask your lender how long it takes for a home loan to approve and disburse. If you need quick approval and quick funds, you can apply for a online home loan with IDFC FIRST Bank.

5. Declare your additional sources of income

In addition to your net monthly income, report any additional sources of income such as income from dividends, term deposits, rental properties or side businesses. This will show the lender that you have a diversified and reliable stream of income to pay off your home loan on time. Remember that lenders may ask you for proof of income, such as tax returns and bank statements.

Approval of a home loan depends on your ability to repay. By following the steps and strategies outlined above, you can improve your home loan eligibility and may qualify for better interest rates.

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