Financial institutions list down standard home loan eligibility criteria based on specific considerations.
These include the following -
Age consideration-
An applicant’s age is among the key factors lenders consider when determining eligibility. It helps them arrive at a suitable tenor to extend the loan for as per the applicant’s remaining years of service.
Thus, the chances of approval for a longer tenor, say 20 years, remains high for young borrowers and vice versa for older applicants. The standard age range sought by lenders is 23 to 62 years for salaried and 25 to 70 years for self-employed applicants.
Financial standing-
Financial standing of a borrower plays a crucial role in determining his/her eligibility for a home loan. A consideration of borrower’s income and repayment capacity is essential to check whether he/she will be able to pay EMIs timely for the loan amount sought.
Thus, for salaried applicants, minimum net monthly income and years of service are considered. For a self-employed applicant, years of business vintage is taken into consideration. It is thus an essential housing loan eligibility criteria.
CIBIL score-
CIBIL score determines a borrower’s creditworthiness and repayment capability. Applicants holding a CIBIL score of 750 and above are considered creditworthy and reliable.
Fixed Obligation to Income Ratio or FOIR-
FOIR is a parameter utilised to assess applicants’ existing financial obligations and their weightage on his/her income. A FOIR between 30% to 50% is considered healthy when evaluating a home loan application.
Down payment made-
A higher down payment made on a house purchase improves a borrower’s eligibility to avail a home loan as the lender’s risk declines.
You can use home eligibility calculator online for assistance. Alongside, other necessary eligibility considerations for home loan include residential status, income as per city of residence, etc.
