How to improve your eligibility for a Home Loan?

When purchasing a home, one can always apply for a home loan. This loan will provide the ideal financial support one may require in the near future. However, before an individual can apply for this loan, certain factors needed to be considered. The home loan eligibility criteria is one such factor.

Based on the applicant’s financial profile, the eligibility factor is determined. These factors in turn affect the consecutive factors of the loan in terms of EMI, interest rates and even the repayment tenure amongst many other factors. In order to improve one’s eligibility for the home loan, one only needs to consider the following:

Include spouse’s earnings: Including one’s spouse as co- applicant in the home loan application can improve the home loan eligibility. As long as the said member is a working member of the family, he or she can be an applicant in this loan processing. Through this process, the liability of the home loan repayment will lie on both applicants. This not only makes it financial stable for the said applicants, but also makes a favourable scenario in the eyes of the financial institute wherein the applicant is applying for.

Clear any previous loan debts: If the applicant has any previous running loans, one should take the necessary steps to clear it out. Any form of debt, in terms of previous loans, credit card payment or any other similar factors will be considered as a risk to investment. Most financial institutes will check the applicant’s financial history to see if there is any pending payments left. One way to ensure that the applicant has a higher guarantee of getting an approval on the loan is ensure that all previous loan debts are cleared. Applicants must also ensure that their credit score is also updated.

Include variable pay: Applicants must keep a clear record of their income and pay. This would also include variable perks or any other payments that one can receive from the employer. Most financial institutes will take this factor into consideration when calculating the home loan eligibility.

Increase the home loan’s tenure: A home loan tenure is in between the range of 15 to 25 years. An applicant can get a higher chance of approval on the loan, if the tenure is long range. However, the applicant must ensure that the home loan must be well within the applicant’s financial repayment means.

Do thorough research: The best way to ensure that one’s applicant is approved is by researching. Check all the influencing factors that affects the home loan eligibility. This could be the credit score. Additionally, the applicant must shop around and compare different rates before selecting one that is most applicable.