While intending to buy a house, it is not enough to look for the kind of house that matches your requirement. You will need to make a decision considering the financial responsibility and affordability. The critical aspects that have to be deliberated upon are the availability of sufficient disposable income after providing for the fat EMI, the down payment and the loan required for e funding the house of your dream.
If you are going in for a home loan, then you should be equipped with the factors that affect your home loan eligibility. Be it SBI Home Loan Eligibility or ICICI Home Loan Eligibility, the factors involved will be as listed below:
- Age of the applicant
- Work Experience
- Credit Score
- Existing loans
- Other sources of income
- City of residence
- Loan Tenure
Before applying for a home loan, it is ideal for assessing your eligibility. The factors that you should one consider are the existing EMIs and credit card payments, mandatory payments like monthly bills, additional expenses you foresee in the near future, and provision for any unforeseen emergencies that might crop up. After providing for all these, the disposable income available will decide your affordability.
You can then use the EMI calculator available online to arrive at the loan amount proportionate to the disposable income on hand. When you are applying to get SBI Home Loan, and the eligible loan amount as per SBI Home Loan Eligibility is not adequate, then you should find ways to enhance your eligibility.
How to enhance the home loan eligibility?
#1. Clear all the existing loans
Debt to income is a part of home loan eligibility. This is an indicator of your repayment capacity. It gives an idea of your existing financial obligations that have to be met with your income and the amount available to repay the home loan, as well as provide for any unforeseen expenses in the future. You can use theICICI Home Loan Eligibility calculator that will calculate the home loan amount you will be eligible for, given your income and existing debt obligation. It will also arrive at the monthly EMI for a given interest and tenure. The EMI calculator factors the debt to income ratio.
If the ratio is higher than the desired level, then you can lower the ratio by clearing the existing loans. SBI Home Loan Eligibility stipulates the debt to income ratio to be within 40%.
#2. Improve your Credit Score
Credit Score indicates your responsibility towards financial commitments. Your credit history will contain details of existing loans, the repayment pattern, settled accounts, etc. If your credit report has recorded any settled accounts, then the financial institutions will consider you a high-risk borrower and will for sure reject the home loan application.
SBI Home Loan Eligibility norms stipulate a credit score above 750 to qualify for SBI Home Loan., Draw your CIBIL report or credit report from any other credit information bureau and check for the score. If the score is less than the desired level, look for the reasons. Clear the overdue, if any, to improve the score. If any closed account is mentioned as a settled account, you should get a NOC from the respective lender and get it corrected by mistake.
The credit utilisation ratio also plays a very important role in improving the credit score. Keep the utilisation limit to 30% of your credit card limit to improve your rating scores health.
Repay your EMIs and credit card dues well within the due date for one year, and your score will automatically soar high. The credit score required as per ICICI Home Loan Eligibility is 700 and above.
#3. Add a Coobligant
Avail of the loan jointly with your spouse to improve the eligibiLity. SBI Home Loan eligibility will improve by availing the loan jointly with your spouse. Both incomes will be considered to arrive at the eligible loan amount.
#4. Choose a longer tenure
If the eligible loan amount as per your current income is not adequate to invest in the property you desire, you can choose a longer tenure to improve your eligibility. The longer the tenure, the lower the EMI. This will help you to maintain the debt to income ratio at the required level.
Under ICICI Bank Extra Home Loan Scheme, you will be permitted to make the repayment up to the age of 67 years, which means you may get a repayment period higher than the 30 years stipulated as per ICICI Home Loan Eligibility conditions.
Initially, you choose the longest tenure to enhance the eligibility. You can make periodical prepayments whenever you have surplus funds to lower the principal burden and the interest outgo.
#5. Declare other sources of income
You may have other income from sources like fixed deposits, mutual funds, rent from other utility property/s, apart from your regular salary or business income. Also, some of the companies give periodical incentives and yearly bonuses to their employees who are not included in the payslip. This is known as variable pay and will add up to your annual income. Declare the variable pay and other sources of income and submit proof of variable pay along with the income documents to enhance SBI Home Loan Eligibility.
#6. Choose step-up EMI
This repayment option is suitable for youngsters who have just started their careers. The EMI will be kept low in the initial years and subsequently enhanced, keeping in mind the progress you make in your career. The profession and the prospects will be considered by the lender to permit this repayment option.
SBI Flexipay Home Loan is one such variant under SBI Home Loans, which offers this repayment option that enhances the SBI Home Loan Eligibility.
Opting for a home loan to buy residential property is one of the most difficult financial decisions to make. Being able to get adequate finance to fund the desired property is another challenge. Implementing the tips to enhance loan eligibility will help you overcome this challenge.