An investment in your own home is a significant and huge decision for anyone, especially for those who are taking the loan for the first time. We all know that buying a property or house involves a lot of money, and it is not affordable to buy a house on an individual’s salary. There are numerous loan options available to fulfill the dream of one’s own house.
It is necessary to understand that you can purchase a house even if you cannot afford to do so. So what is the solution? The solution is to opt for a home loan. Remember that you have to qualify for the home loan eligibility criteria to be eligible for a home loan.
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What is Home loan eligibility?
Home loan eligibility helps you meet the lender’s requirement to get a loan approved. The amount you are qualified to get depends on some factors like
- Age of the applicant
- Total income sources of the applicant
- Credit or CIBIL score
- The capacity of the applicant to repay the loan amount
How to boost your odds of getting your home loan approved?
It would be best if you found a trustable and reliable lender and need to familiarize yourself with all the housing loan eligibility criteria of the lender. If you have chosen your lender and know all the qualifying factors, the next question arises: are you able to qualify all the factors?
If your reply is no, you do not have to worry. Here we have provided a list of six steps to increase your chances of getting your home loan approved.
1. Clear all your debts and loan
The first step you should consider to increase your chances of getting your home loan application approved is to clear out all your existing loans and debts. Existing loans will reduce your chances of a home loan. Also, if you have existing debt and apply for a home loan, it will become hard for you to repay all loans, not to mention that you may not be offered good terms even if your home loan application gets accepted..
2. Increase the period of your home loan tenure
One of the best things to improve your chances to fulfill your home loan eligibility criteria is to increase the period of your home loan tenure. Tenure is the period in which you will repay the loan amount to the lender. When you have a long tenure period, your monthly EMI amount goes down. It will make the repayment process easy for you. Also, if you have chosen a longer tenure period, then chances increase for the lender to approve your application because there is less risk involved.
3. Maintain your fixed obligation to income ratio (FOIR) below 30%
While applying for a home loan, you shall keep in mind to maintain your FOIR or fixed obligation to income ratio below 40 percent. It will increase your chances of getting your home loan approved by the lender. Fix Obligation to Income Ratio is the amount for your monthly salary used to repay the loans in your name. If your FOIR percentage is lower, your chances of getting a home loan increase.
4. Keep your credit score high
You must be familiar with the fact that a lender will review and check your complete credit history to sanction any loan. One of the most important elements of the credit report is your credit score. It would be best to have at least a credit score of 700. The higher the score, the higher the chances of getting your home loan approved.
5. Include all income sources in your home loan application
The next thing you can do to boost your chances to qualify for housing loan eligibility is to include all income sources in your home loan application. Add your side hustle income, income from a secondary source to application to boost your overall income. If you have many income sources and strong income, the lender will approve your home loan without any problem.
By following these steps, you increase your chances of securing a housing loan. To know more about home loan eligibility criteria and how you can increase your credit score, visit the official website of lender’s website.
6. Consider a joint home loan
One of the vastly common methods people use to make the whole process of home loans hassle-free is to go for a joint home loan. Get a joint home loan with a close family member who has a good income and credit score. A joint home loan is considered less risky by the lenders because if one person cannot repay the loan amount, the other person has to make the payments.