How to improve your chances of getting a Home Loan for buying a house?

If you want to start the journey towards homeownership, having an ambition is not enough. You must have a strategic plan to improve your eligibility to work towards fulfilling those goals. Improving eligibility for a Home Purchase Loan increases your chances of approval. The document requirements might seem extensive, but they cannot be ignored.

Ensure you meet the lender’s eligibility criteria to get the desired Loan amount. Here are ways to enhance your eligibility:

1. Increase your credit scores

Always maintain a high CIBIL score because it increases your chances of receiving a Loan for a Home Purchase. It should be 700 or higher for the lender to reduce the interest rate on the Loan. Additionally, having savings and investments increases your eligibility. Clear all your outstanding debts and pay the EMI on time because any default or delay affects your credit score. Paying your debts on time builds a decent credit score while increasing your eligibility.

2. Add a co-borrower

Apply for a Joint Home Loan by including your spouse or family member while applying. The combined monthly income of both applicants is considered for evaluation. Including a co-applicant with a high credit score improves your ability to get a Loan. Your EMI affordability increases, and you can receive tax benefits.

3. Choose an extended tenure

You need to increase your Loan tenure if you want a higher amount. Although opting for a longer tenure optimises Home Loan eligibility, it reduces your EMI amount while increasing your total interest payable. This also makes it easier to repay the loan on time, as there will be fewer chances of default.

4. Pick a lender you prefer

Although most lenders operate fairly and responsibly, a few may foster situations with confusing terms, hidden fees, and aggressive marketing tactics. Therefore, it is best to research the one you choose thoroughly. Ask questions and know your rights. Map out your moves at least one year in advance, and you will have enough time to ensure a long-standing relationship with your lender in the process.

5. Additional fund sources

Any additional sources of funds that are part of your monthly income can enhance your eligibility for a Home Purchase Loan. Sources through Fixed Deposits, Mutual Funds, and rental corpus are considered additional sources. It elevates your repayment capacity with the lender.

6. Higher downpayment

Another way to increase your eligibility is to save up for a larger down payment when purchasing the house, as the Loan amount and the risk of default decreases. A higher down payment lowers the EMI cost and the interest rate.

Conclusion

A Home Loan is one of the most challenging financial decisions, but you can acquire it successfully with thorough research and a well-prepared plan. You can start your homeownership journey quickly with these tips.