When you make a plan to purchase a house, there are crucial questions pertaining to finances you need to answer. Taking a loan is an excellent way to appropriate funds as it is difficult to mitigate a big amount of money at once. Here you can understand how you become eligible for a home loan.
Almost every family or individual wishes to buy their dream house someday. People prefer to buy a house either for investment purposes, for current living needs, or for post-retirement age. One can be buying their first house or upgrading to a better house, but the idea of taking credit for a home can be stress-inducing. To bust this myth, it is important to understand why it is a good idea to turn to loans for help to buy your dream house.
No More Stringent Guidelines for Loans
It has never been easier to avail home loans. Formal sources of loans are the best and most trusted sources to borrow money from. Relaxed norms to get home loans offered by financial institutions, enable potential home buyers to get by the loan process without any added stress.
Here are the factors that impact your propensity to borrow money from lenders:
- Assets and Liabilities
Any surplus funds or potentiality of dispensable income is a pertinent concern for the lender when they consider granting you a home loan. Not just that, your credit history which is representative of your liabilities inform the lender about your financial health and your reputation of timely repayments.
- Age of the Borrower
Age is one of the most basic factors that lenders look for when they grant home loans. For reference, the age bracket of 20-60 is most preferred, but with less strict rules, financial institutions offer home loans for the age bracket of 18-70.
- Occupation and Work Experience
Formal lenders have an inclusive approach to financial democracy. Therefore, they give out loans to salaried individuals as well as self-employed individuals. Occupation determines the repayment capacity of an individual and that is why it is a key factor in helping you get your home loan.
However, it is also important to note that financial institutions would prefer to loan funds to those people who have a credible background on their finances. Additionally, work experience in respective fields of the home loan applicant increases their credibility.
- Family Related Factors-Spouse’s income, Number of Dependents
Home loans by lenders have a good feature of being taken up as a joint home loan. In such a case, the chances of a better repayment capacity become better. Lenders would prefer information on your spouse’s income to determine your accurate repayment capacity and consequently, which can influence how you fulfil the home loan eligibility criteria.
The number of dependents is also an element when lender consider giving you a home loan as they would like to know what are the nominations you would want to put up for the loan.
- Citizenship of the Borrower
One of the easiest yet equally important determinants of being granted a home loan by a financial institution is your citizenship. In India, formal lenders require you to possess Indian citizenship for fulfilling the criteria to get a home loan.
Thus, as long as you fulfil these criteria, you are sure to be granted a home loan. In fact, you can use these points to negotiate on the interest rate with the lender sometimes too. For instance, a young working professional with good salary and assets may have higher chances of negotiating with the lender for a lower interest rate than an aged person with no job. Thus, use it to your advantage and get a home loan for your dream home now.