by avni Jadhav
Published Mon, Dec 18th 2017, 14:03 | Business
Building or purchasing your dream home incurs significant costs, and for banks and finance companies to be able to lend money, they have to be convinced that you have the potential to make repayments for an amount that you've taken. A measure of this ability is termed home loan eligibility.
People from varied income levels are eligible for a different loan amount based on their annual salary expenses, job stability, and credit score.
Let's understand home loan eligibility through these simple tips:
Financial Stability: The type of employment or business you do plays an important role. You need to have a stable job or business with a set flow of income which could help you easy repay the monthly installments. Having a joint income with your spouse or parents could help you qualify for a higher loan amount.
Your home loan eligibility is also calculated on the basis of multiple factors including monthly income, fixed monthly obligation, current age, retirement age etc.
So, basically, your loan eligibility is an indicator of your home loan affordability.
The number of debts that one has racked up and pending to be cleared off will also have a higher impact on his or her loan eligibility. The more amount of pending debt, the lower the eligibility for another loan amount.
Your CIBIL score comes into play while deciding your eligible loan amount. The more regular you pay off the mortgage of previous loans, the better would be your loan history and hence better will be your chances of getting your new loan approved.
Every loan requires the borrower to keep his or her home as collateral, just in case due to any unexpected situation they're unable to repay back the loan amount with the interest. If you have an already existing house it would act as great collateral for your home. The higher the value of a said home, better would be your eligibility for the housing loan.
Taking a home loan requires you to convince your bank or finance company that you’re in a position to make sound and timely repayment of the loan along with the interest rates well within the time. So, if the said parameters work in your favour, then availing any home loan would be just a matter of paperwork and approvals.