When computing loan eligibility, banks take into account the age of the applicant, his salary, repayment/credit history, savings, profession, location of property, and other debts. Some professions are categorized as negative or risky by the lenders while some jobs fall in the preferred list. As a thumb rule, the EMI for your home loan must not exceed 40 percent of your gross monthly income.
Improving Your Loan Eligibility
When applying for home loan, you can use following methods to enhance the availability of home loan from your bank or lending company.
- Maximum Down payment: You can enhance your loan eligibility by paying maximum down payment for the loan. This will add confidence in your bank or lending company to provide loan needed for you.
- Clubbing Incomes:Clubbing income is simplest way to enhance loan eligibility. You can club your income with your father, mother, spouse or son and jointly apply for the loan. Clubbing income enables you to get home loan as your monthly income will increase by clubbing the income.
- Longer Tenure: When applying for long term loan or bigger loan amount, you can opt for longer tenure. A longer tenure will make you eligible for a bigger loan for the same income level.
- Co-applicant: Co-applicant helps you to apply for home loan. You can either apply for home loan jointly with your spouse, family members or you can apply with your friends or other relatives. Co-applicants enable both to get tax benefit and get a higher loan amount sanctioned from your bank or lender.