5 ways to increase home loan eligibility |
Posted: August 23, 2018 |
We present 5 simple ways to increase your chances of getting a higher loan amount to buy a property. After a few years of living in rental accommodation, you have decided that it is now time for you to buy your first home. Accordingly, you start scouting for properties and making inquiries about home loan providers. Then you stumble upon your first roadblock: you realise that you will not get as much loan amount as you previously anticipated. In short, you realise that your home loan eligibility is low. Your loan eligibility is computed on the basis of your income, age and credit history, among other factors. Consider the following 5 ways to increase your home loan eligibility: #1 Repay existing debts. The first thing that lending institutions check when considering a loan application, is the applicant’s CIBIL score. If you have unpaid debts or a history of loan defaults, then the lender is less likely to offer you good home loan eligibility or a lower rate of interest. A poor credit score can scupper your chances of getting a home loan at all. Meanwhile, you can clear up your credit score by repaying existing debts before taking a new home loan. #2 Get your salary restructured. Your home loan eligibility is primarily considered against your salary or business income. The higher your salary, the higher the loan eligibility. But there is a way to increase your chances of getting more loan amount – you can get your salary restructured such that the variable heads of pay can be increased. This improves your chances of getting more loan amount. Do speak to your company HR about the restructure. #3 Show additional sources of income. As mentioned in the point above, the more your income, the higher is your home loan eligibility. Apart from your salary, you can also show other sources of income, such as regular freelance work done part time, or rental income from a property that you own. Even sources like a fixed deposit maturing soon can be shown, provided the interest income on it is sufficiently high. #4 Apply for the loan with your working spouse/sibling/parent. One more way of increasing your loan eligibility is to apply for the home loan with your working spouse. In this case, your spouse can be the co-borrower on the loan, and you can show both incomes to get a higher loan amount. Some lending institutions also allow you to co-apply for the home loan with a working parent or sibling. #5 Take a personal loan if you have never borrowed a loan before. It might seem surprising that we recommend taking a loan to increase home loan eligibility. However, this tip applies only to those who have never taken a loan before – after all, the lending institution needs to check your repayment capability and must compare it against past performance. The lender may put your application in abeyance if there is no past loan record to study. What you can do is take a short-term personal loan and repay it in less than a year. This will give the lender a credit history to work with.
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