Your house is no longer a place just to take shelter in. Today, it is an indicator of your success, prestige, prosperity and possibly your happiness too. Hence, everyone is on the lookout for a house that is both comfortable and luxurious. However, buying your dream house is not a child’s play. With prices of real estate reaching new highs every year, investing in property is an expensive dream, which not everyone can afford from their own pockets.
How can a home loan help you fulfil your dream?
Thankfully, home loans come to your rescue in such times. Home loans are an easy and convenient way to buy the house of your dreams without exhausting all your hard-earned money. The best part of a home loan is that you need not stress about repaying it immediately. Home loans have a long-term repayment tenure upto 30 years, which helps you repay the loan comfortably as per your financial capability.
Taking a home loan has become easy and fast, especially with all the online facilities. You can look for different lenders and compare their offerings online using a home loan calculator. Once you find the ideal lender to finance your house, you can proceed with the application. All you have to do is fill the application form, submit the required documents and get the application approved. Once the application is approved, the loan amount would be disbursed in your bank account.
Home loan eligibility
However, one important aspect of taking a home loan is to fulfil eligibility criteria. Lenders have specific eligibility criteria that you need to fulfil to be able to avail the loan amount you need. These criteria is important for the lender to ensure that you are capable of repaying their money. You can easily find your eligibility with the help of an home loan eligibility calculator, without even contacting the lender for the loan. While the eligibility criteria may vary from lender to lender, the most important eligibility criteria for a home loan are your age, credit score, and your income.
Most lenders require you to belong to an age bracket of 18-65 years if you need a home loan. It is because during these 40-45 years, you usually earn an income and are unlikely to default on the loan repayment. Similarly, your credit score is a reflection of your creditworthiness. A good credit score not only increases the chances of loan approval but also helps you get the loan at a competitive interest rate.
Home loan eligibility based on salary
Another crucial aspect that lenders consider while approving your loan is your salary. Apart from credit score, it is through your salary that the lender judges your repayment capacity. Salary is the reflection of your capacity to bear the cost of borrowing and to repay the loan
If you have a salary that is lower than the lending institution’s minimum criteria, they could reject the application, expressing doubts on your repayment capability. Your salary not only determines the loan approval chances but also determines the maximum loan amount you can avail.
How does a lender ascertain your salary?
The lender considers your net monthly salary after deducting all perks and incentives. A high salary can fetch you a high loan amount and vice versa. Moreover, usually, lenders offer a home loan that is around 60 times your salary. So, if you want to take a high loan amount, reveal all your income sources and project a high monthly income while applying for the loan.