Everyone dreams of buying a new home for their family. So, not all buy homes with loans, but few have to take home loans to make their dream home with their hard work money. Most of the middle-class people take home loans to buy a home for their living. Most of them have various difficulties taking out home loans.
There are eligibility criteria for every loan in India, so as per the basis of criteria, if you are eligible, you can take a loan. If not, then you will find it very difficult. This is the point to note that you will not see this much difficulty in locating your dream, which you will find while taking a home loan from a bank.
Some factors can affect your home loan eligibility; you have to take care of those things. Some essential eligibility criteria include the individual’s age, who must be 23 years or above to apply for a home loan, and who is a citizen of India. So, check your home loan eligibility criteria in the below paragraphs, and apply for home loans smoothly without any inconvenience. These are seven key factors that determine your home loan eligibility.
7 Key Factors that Affect Your Home Loan Eligibility
The key factors that are responsible for your home eligibility are mentioned below:
1. Your Income
Most lenders first ensure that you have a stable source of income or not pay interest on your home loan. They will see some factors such as your monthly income, your employment type, whether you are salaried or self-employed, and other financial issues. If you have a stable income source or are a self-employed (business person), you can pay interest or not; as a business person, you have assets or not; if you have assets that cost the same as a home loan cost, then the bank will give you a loan. Very important, they check your ITR for eligibility. As an employee, if you have a stable income, then this is a plus point for you when taking out a loan. If your financial condition is good, then you are eligible to take out a home loan.
2. Credit Score
A credit score is an important factor that you have to maintain to take a home loan. Lenders check your credit score which reflects your financial creditability. If individuals have a good credit score, they can take home loans. Credit score defines whether an individual has a good score to handle the credit or not. If you maintain your credit score and it is above 750 then you are eligible for this loan criteria.
Credit scores help lenders to check whether you are capable of handling this home loan or not. If your credit score is below 750, then it ensures that you have a poor credit score, and it reduces your eligibility for taking home loans. Make sure to maintain your credit score correctly so that in the future, if you take a loan, it will be helpful for you. If we talk about ICICI Bank it offers home loans at competitive interest rates. The bank is customer-friendly; you can take a loan from there and enjoy your dream come true home.
3. Down Payment
The down payment is the amount an individual has to pay while purchasing the home. If you pay a high amount at the time of downpayment, then your interest rates on home loans will be reduced. A high down payment amount increases your eligibility chance for taking a home loan. If you have an amount for a down payment that is above the minimum requirement, then it helps reduce your interest rate for the home loan.
4. Documentation
All your important documents must be systematically and correctly. Supporting the right documentation is one of the critical things when taking home loans. You have to give all your records related to income and financial status, any precious loan you had taken or not, your credit score document, your age registered paperwork, Indian citizenship, all your fixed and nonfixed assets record documents, etc. If this paperwork is not in order, then your eligibility for taking a home loan will be affected. Maintain all your documents systematically to ensure a smooth process.
5. Loan Tenure
It is the duration within which you have to repay the home loan. If you want longer tenure, it is easy for one who wants a low monthly EMI rate. For those who need shorter loan tenure, you have to pay high EMI rates, which will reduce your home loan burden because shorter texture helps you complete all your loan repayments shortly. You can also apply for a tenure that will not be too long and not too short and maintain balance.
6. Current Obligations
Current obligations means the status of your current ongoing loans and credit card payments. These current obligations define whether you are capable of paying the whole amount of the loan with interest or not. If you have not repaid your current obligations for longer, then your eligibility for taking loans will be reduced; lenders do not approve individuals with these conditions. In such cases, first try to complete all your previous loan payments and then apply for a home loan without any current obligations. Try to include all your extra earnings bonus amount and rental income in the loan application to boost your eligibility for taking home loans.
7. Your property details
The property you want to buy after taking a home loan, lenders check your property details and see whether it is secured without any cases or other details. If your property is worth more, then you can avail yourself of a higher loan amount. If an individual chooses the right property, which has the potential to increase in value, then it is a good decision to take a home loan. Select a property that increases its worth fast in the market. It will increase the chance of eligibility for taking a home loan. Lenders check what amount you can pay for the down payment on the property. If you have a 20% down payment on your property cost, then you can easily take a home loan.
Conclusion
These are the 7 factors you need to ensure while taking a home loan. Secure your home loan effecting factors to buy your dream home with the help of a home loan. Always remember to maintain a good credit score, stable income, and other factors mentioned above. Make sure not to affect your eligibility for taking home loans to buy your dream home smoothly without any inconvenience.
