Increase Your Home Loan Eligibility

First, Understand Your Home Loan Eligibility

All Home finance companies refer to their own EMI table when calculating the EMI payments. This table lists the monthly EMIs per lac, for different tenures and rate of interests. Therefore, the EMI per lac and the individual's income available to make those payments are the two leading factors in deciding about the home loan eligibility for the individual.

The things are of course not as easy as it seems to as not all the home finance companies use the same method of determining the Home Loan eligibility. However, the basic nature of calculations remains common. For instance, some companies give weightage to an individual's gross salary to evaluate the "income available for EMI payments". The calculations will also be different in case of self employed individuals.

Following are other factors helping in evaluation of home loan eligibility:

Nature of Job of Individual: Nature of Job of the Individual: Most home financing companies carry a list of 'negative' professions. This can cause a lot of hassles for the individual coming from such professions before being finally getting the loan amount.

Location of the Property: Likewise, they may consult another list known to carry 'negative areas'. Any individual applying for the loan to get a home in such areas may not be granted the loan by home finance companies. The same is the case with the property falling within the geographical limits as defined by the home financing institutions.

Personal Details of individual: Personal details of the individual are another factor that is taken into account by home finance companies. It may or may not contain credit history of the individual as per the formalities to be filled with the concerned institution. All these factors help the lenders in deciding the individual's Home Loan Eligibility.

It is important for everyone interested to take a Home Loan to know about the basics of home loan calculations. Apart from helping in evaluating the part of their income being available for EMI payments, it turns to be useful in zeroing in on a home finance company as per the requirements.

Ways To Increase your Home Loan Eligibility

Credit History : Your chances of getting a home loan are increased if you have a good credit history which is known by banks by checking the borrowers Cibil score. Now it is very hard to get a loan from another bank when you already have a bad debt with one bank.

Clubbing of income : Your eligibility to take a home loan will augment when you club your income with your spouses income, bank in this case will calculate your eligibility on the basis of the clubbed income of both the applicants. You can club incomes of spouse, children & parents staying with you and having regular income.

Enhance your loan tenure : Longer is the loan tenure, lower will be the EMIs which further increases the repayment capacity of the borrower & in turn enhances the loan eligibility.

Step-up Loan: In this type of loan EMIs remain low in the beginning & increase gradually as and when the borrowers spending power increases. Therefore lower EMIs in the initial years enhances the borrowers ability to pay & further increases the loan eligibility

Increase the down payment : You must know that in a home loan bank finances only 85 to 90% for the property & the rest amount has to be funded by the borrower. You should increase the down payment if you have more than required amount which will mitigate your debt considerably.

by: jacksup

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