5 Things Which Are Considered to Determine Your Home Loan Eligibility

 


Buying a home is not an easy nut to crack. There's a lot of things that you would need to consider. The huge amount of funds involved in purchasing a home makes it one of the most prestigious and high investments. To purchase a home, usually individuals depend upon a home loan. A home loan is a secured and high-value loan taken only for the purpose of buying a home. It is not flexible for any other purposes to be met. The huge loan value makes the eligibility criteria high. In order to get a home loan approval, you need to meet some of the common eligibility criteria. Some factors like debt to income ratio, income, credit score, property, and employment background are important for a home loan eligibility. Let us find out how:

●     Income: Income directly impacts the fate of the home loan application. If your income does not seem to be sufficient enough to meet home loan EMI and your daily obligations, your loan provider will reject your loan. Maximum home loan defaults are caused due to shortage of funds after a certain point in time.

●     Property: A good property is easy to recover. So, in case a borrower defaults the loan provider will be able to recover the due amount from the reputed property easily.

●     Debt to income ratio: This is the ratio between your income and the amount of debt you are already paying from your income. If this ratio is less than 30% then you are good to go for a home loan. However, if you already exhaust 50% of your income in paying debt EMI, you are not eligible for a home loan. A home loan is a huge financial commitment for a good number of years.

●     Employment stability: Stability at work ensures that you are getting paid well, on time and there is growth. All of these factors directly influence your repayment habits. A loan provider always offers a loan to an individual with job stability.

●     Credit score: A credit score is the representation of the financial health of an individual over the past years. This score gives an idea about past debt repayment and financial activities. If an individual has a good score it means they have paid their bills timely and have a clean debt repayment track record. This makes him eligible for a home loan without any hurdles.

Summing up

A home loan is one of the best ways to purchase a home with ease. However, since a home loan is a high-value loan term loan, you must use a home loan EMI calculator to compare and choose the right loan cost.

Must Read : Buy your First House with Home Loan Facility

Comments

Post a Comment

Popular posts from this blog

Mind-Numbing Facts About Getting a Housing Loan

Image
 Home is indeed an achievement. A home offers you social status and financial stability. However, the high price often becomes the reason for the denial of home and home loans. A home loan or house repair loan is very beneficial to take if you meet credit eligibility. Long gone are the days when you had to settle down for less, here are some of the facts. Facts about a home loan A home loan is a high-value amount. While the most common range of loans is between 30 Lakhs to 1 crore, there are loan providers that even offer a high loan amount value of up to Rs. 3.5 Crore as a home loan, which can ease the home buying process for individuals. So, If you are capable to handle a high-value loan, the loan providers do not mind offering you one. You need to meet the eligibility though. Take a good note of all the competitive rates of interest that are available in the market. Before choosing your loan provider, you should compare the home loan interest rates offered by different loan pr
Read more

What is the Importance of a Good Credit Score?

Image
A credit score is an all-in-one factor that considers credit profiles and credit building. With a good credit score, you can enjoy a smooth and flexible borrowing experience. Individuals with a good credit score always enjoy perks and advantages like instant approval, desired loan amount, low rate of interest, better terms and conditions, and high negotiation power. When evaluating purchasing financial institutions and loan providers, credit score is one of the most important factors. On the basis of a credit score, banks and financial institutions determine whether to offer a loan or not. It is not only limited to approval; the terms and conditions of borrowing are also influenced by credit score. With a good CIBIL score , the entire borrowing experience turns out to be a hassle-free one. Let us discuss a few of the important aspects of doing a CIBIL score check to maintain a good credit score. High negotiation power Negotiation is very important in borrowing. You cannot simply a
Read more