Six Best Ways to Improve Home Loan Eligibility!
- You can improve home loan eligibility by adding a time-saving family member with good credit as a co-applicant.
- You should also check your credit score regularly so that you can take corrective action to improve your score if it is low to avoid loan denial.
- Paying your debts sincerely can help you build a good credit score, which in turn will improve your eligibility for a home loan.
Banks run a comprehensive process to determine an applicant’s eligibility for a home loan. The maximum eligible amount and interest rates are also determined by the bank based on the applicant’s profile, which includes income, job type, credit rating, etc. Eligibility for a home loan can be increased by following the tips below:
1. Add a co-applicant
You can improve home loan eligibility by adding a time-saving family member with good credit as a co-applicant. It will also increase the maximum amount you can borrow, as your EMI financial capacity will increase. When assessing eligibility for a home loan, some lenders may club the income of family members.
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2. Maintain a credit score above 750
A higher credit score (preferably around 800) can increase your
3. Sincerely repay your debts
Paying your debts sincerely can help you build a good credit score, which in turn will improve your eligibility for a home loan. Moreover, you should also have some savings and investments which can also increase your eligibility for the home loan.
4. Open an account with your preferred lender
If, after exploring various lenders and comparing the benefits they offer, you have decided on a lender, it is a good idea to open an account with them. This should be done at least a year before applying for a home loan, as you will have plenty of time to establish a relationship with the lender. A good relationship with the lender will increase your eligibility for a home loan.
5. Declare your additional sources of income
Your eligibility for a home loan may be enhanced if you declare additional sources of income as this indicates your higher repayment capacity.
6. Choose a longer tenure
Choosing a longer repayment term can increase your home loan eligibility because the EMI amount will be lower, which means you’re more likely to make timely payments. To the lender, this will appear as a low risk loan to you and by doing so your home loan eligibility will be improved. However, on the other hand, it may cause you to pay higher interest over the life of the loan.