You’ve always aspired to build your own home, right? Well, many people are living this dream and working very hard to make it happen. Home loans are a way to help all these people achieve their dream of living in their own home. But not everyone is eligible for a home loan. The bank or financial institution will only help you if you qualify for the help. When applying for a loan, you also need to consider a few factors and prepare your applications accordingly. We’re not saying it guarantees success, but it will certainly help improve your chances.
Here’s a quick preview of some basic criteria that will determine your eligibility for a home loan:
This is one of the most important questions to answer when applying for a loan. Ideally, the financial institution will examine your income and, based on the analysis, determine whether you are eligible to pay the EMIs of the loan you are applying for.
Improve your credit ranking
When you have more debt on your head, your credit score goes down. This rating is also affected if you are a defaulter. To be eligible for a loan, you must have excellent credit, only then will the bank consider you worthy of lending money.
Authenticate the property
Before you submit your loan application, the bank wants to know something about the property. For example, there are certain developers and construction companies that are blacklisted by financial institutions. If your home or property has anything to do with it, the bank will most likely reject your loan.
The bank isn’t sitting there doing community service, is it? When they lend you money, they want to be absolutely sure that the repayment will come. Even if the applicant is insolvent, the bank uses his assets. When applying, you must therefore be able to prove that you have sufficient assets to fall back on.
Typically, people who have retired from active service are not eligible for home loans. This is because they are not expected to be able to repay massive amounts. However, in cases where the person has sufficient assets and a stable source of income, the bank may make an exception.
These are general criteria only. For more details, it is best to ask the bank officials about the eligibility rules at the time of applying for the home loan.