Buying a home is one of the most significant milestones in one’s life. It requires meticulous research, careful planning, and thorough checking before the buyer can be at peace. Now irrespective of whether or not you can buy a property with your savings, one is usually advised to take a home loan to spread the commitment over a few years. What then follows is a nerve-wracking analysis of each bank’s home loan and deciding on the right one.
In the midst of all this, it is also important to ensure that you can maximise your eligibility for a home loan or qualify for the maximum amount of home loan possible. Banks can usually lend up to 80% of the cost of the property subject to the borrower’s eligibility.
Here are the top six tips to increase your home loan eligibility:
Increase loan tenure
This is probably the oldest tactic in the book. The logic is that when one increases the tenure of the loan, the EMIs are reduced. Lower EMIs then boost the borrower’s loan eligibility.
Step-up loan
The step-up loan is another simple way to boost one’s eligibility. Under this scheme, banks offer loans at lower EMIs in the initial years and gradually increase the EMI as you start repaying the loan.
(Read More: 5 Mistakes That Can Ruin Your Home Loan Prospects)
Clubbed income
The loan eligibility increases dramatically if you join forces with a family member. Adding a co-applicant adds to the value of your loan application.
Combined incomes enable you to get a higher loan if your income doesn’t make the cut. This also means that the liability of repaying the home loan is left to both of you.
Variable pay
One mistake that a lot of people make when calculating their home loan eligibility is not considering the variable aspects of their pay such as performance-related income and other monetary perks. You may notice that once you include these components, your loan eligibility is instantly boosted.
Prepay existing loans
If you already have a loan in your name (i.e. car loan, personal loan, etc.) it could bring down the amount you are eligible to borrow. One way to fix this is by pre-paying any existing loans you have in part or in full.
Employer-bank offers
Banks sometimes have tie-ups with large multinational corporations wherein they offer the employees of said corporation some additional benefits for a home loan. These could be in the form of lower interest rates, waiving of the processing fee, and so on. It will be prudent to check with your banker if any such offers are available.
Further reading: Here’s What to Do If Your Home Loan Application Is Rejected