Know the criteria on which lenders decide your home loan eligibility
The housing loan sector in India witnessed an exponential growth in the past few years and currently holds a valuation of Rs. 28 Lakh Crore as of August 2019. The easy obtainability of home loans from various financial institutions is considered to be the primary reason behind this growth.
You are required to fulfill a few home loan eligibility criteria to avail such credits from any reputed financial institution.
Lenders determine the eligibility of an applicant by considering the factors mentioned below –
Age - Home loans are long term credits. Hence, financial institutions prefer applicants who have several years of service left in their career. An applicant in the age bracket between 30-40 is generally considered to be ideal as they are somewhat financially stable.
Income - Financial institutions approve a loan application only if the EMI amount does not exceed a certain percentage of your income. Ideally, your debt obligations should not exceed 50% of your monthly income. Along with that, you are required to hold a stable income. Self-employed individuals with regular monthly income are also eligible to avail such credits.
Property valuation - It is a crucial factor that determines the eligibility of your home loan. If the Loan to Value (LTV) ratio is higher, lenders may not approve your application.
Along with the factors mentioned above, the CIBIL score can also affect your home loan eligibility. Ensure that you maintain a decent credit history to avoid your application from being rejected.
