There are many things that you need to consider before you take the big step towards buying your own home with a loan. One of the things that you need to pay close attention to, is the eligibility factor when it You may be earning enough if you were living on rent, but is your salary good enough to afford a property that suits your needs along with meeting all your other expenses? If thoughts such as these are giving you the jitters, consider these suggestions that can help you increase your home loan eligibility.
In this day and age, it is difficult to take up such a huge responsibility all by yourself. If both you and your spouse are earning members of the family, you can decide to apply for a joint loan. Unmarried men can also think of co-applying for a home loan with a working parent. Women can do the same too, but in such cases the parent cannot be a co-owner of the house, for if there is an impending marriage the property must be in the name of the girl to avoid family disputes later.
This is perhaps the most plausible option when it comes to increasing one’s eligibility. By increasing one’s loan tenure, one can decrease the monthly installments and thus borrow a higher amount. However, it is important to bear in mind that by increasing your loan tenure, you actually end up paying a higher amount of interest to the lender.
Before applying for a home loan, you can consider clearing the other outstanding liabilities. This will decrease your debt-to-income ratio and make you eligible for a higher amount of loan.
Your prospective lender may consider increasing your loan eligibility if you have been a prudent long term investor. You could show collaterals such as life insurance policies, or other long term investments such as National Savings Certificate and Indira Vikas Patra. You could even keep your stocks and shares as collaterals but in such cases the ownership must be transferred to the lender. However, this is not a very wise decision, because it beats the very purpose of long term savings.
Lenders will also consider regular and consistent additional incomes like rental income while calculating the eligibility. The rental income you are getting on properties such as commercial or residential can be considered to enhance your loan eligibility.
If you work in a big company or a reputed MNC, chances are your employer will be a customer of the best known lenders in the country. In such a case, you can make the best use of the relationships your company shares with your lender and convince them about your prospects in the company. You may tend up not only increasing your loan eligibility, but also getting a loan at lower interest rates. Employees of big companies are often given the option of a “step up loan”. In this kind of loan the EMI increases as the professional starts rising in his career and starts drawing a higher salary. This too can be an excellent opportunity to explore.