Important Factors Affecting Your Home Loan Eligibility

If you want to apply for a home loan to buy for your dream home, you would have to qualify on the eligibility parameters which are laid down by the lenders. Lenders prescribe the eligibility requirements in order to issue loans to borrowers who would be able to repay their loans without making any default. Defaults. That is why every lender has some specific has home loan eligibility criteria and these criteria affect the approval of your loan application.

Moreover, the eligibility parameters are also important factors affecting your home loan eligibility. Let’s see what these parameters are and how they affect your home loan eligibility.

Your Home Loan Eligibility

• Your Age:

Borrowers aged between 18 years to up to 70 years are allowed to avail a home loan. So, if you are within the given bracket, you can avail a loan for your needs. Moreover, your age also determines your loan repayment tenure. The higher the age the shorter would be the tenure that you can avail. Lenders require borrowers to repay their home loans before attaining 70 or 75 years of age. So, if you are 55 years old and the maximum repayment age is 70, you would get only 15 years to repay the loan.

• Your Occupation And Its Stability:

Whether you are a self-employed individual, self-employed professional or a salaried individual, this also affects your home loan eligibility. Lenders usually allow favourable loan terms to salaried individuals as their salaries are more stable than the income earned by self-employed individuals. Besides your occupation, the stability of your occupation is also an important factor. Home loans are issued to those who are either stably employed in an organisation or those who have a successful running business since the last 3 to 5 years.

• Your Income:

The level of income that you earn directly affects the amount of loan that you can avail. While home loans depend on the value of the property, your income is also taken into consideration by the lender. If you have a high income, you can avail a high quantum of loan and vice versa.

• Co-Applicant For The Loan:

Adding co-applicants to the home loan application increases the eligibility for a home loan. If you add a co-applicant who is also working and having an independent income, the total income increases which affect the income criterion of the loan. That is why lenders allow higher quantum of loan when co-applicants are added. Moreover, a co-applicant with a good credit score would increase or improve the combined credit score for the loan making the loan application more favourable.

• Your Credit Score:

Lastly, your credit score also affects your loan eligibility. Home loans are available to borrowers who have scores of 700 and above. If you have a low score you might not get a loan and even if you do, the interest rates would be higher.

These are the important factors which affect the home loan eligibility of every borrower. If you are looking for a home loan you should ensure that all the eligibility parameters are fulfilled so that you can avail the loan easily.