Buying a home is a major financial decision requiring careful planning. Thanks to Home Loans, it is easier to buy a home than ever before. Banks can cover up to 90% of the property’s market value with a Home Loan; borrowers just need to pay a certain amount as a down payment. Also, there are tax benefits that make Home Loans more affordable. Borrowers should know various aspects that impact House Loan interest rates and eligibility. This way, they can benefit the most from a Home Loan. They can strategise, apply and get approved for a high loan amount.
How to Maximise the Home Loan Amount
Here are certain factors that need borrowers’ attention before making a Home Loan application:
Maintain a High Credit Score
A credit score is the first thing that lenders check when individuals apply for a loan. Lenders use it to gauge the borrower’s creditworthiness. Individuals can get approved for a higher Home Loan amount with a good credit score.
Lending institutions will likely lend more money to borrowers because of their proven creditworthiness. A credit score is a three-digit number assigned by credit bureaus based on the borrower’s previous debts and financial behaviour. Maintaining a good credit score is a smart move to check the credit report before applying for a Home Loan and check for any errors.
Additional Source of Income
Lending institutions need to ensure that the borrower has a stable source of income using which they can repay the loan amount within the loan tenure. Banks check the employer’s reputation, borrower’s job profile and work experience before approving a loan application. Applicants can show an additional source of income to impress the lender and get approved for a higher loan amount; it can be rental income.
Co-applicant Addition
An individual can own a residential property jointly with the spouse or other earning member in the family and apply for a loan with the co-applicant. It makes the loan applicant eligible for a higher value. Other benefits of joint loan application include shared debt repayment and tax advantages. The loan amount can be significantly higher if the co-borrower has a good credit profile.
Low EMI to Monthly Income Ratio
An EMI-to-income ratio can make a gap between the desired and sanctioned loan amount. The maximum permissible EMI is 50-60% of monthly income. Borrowers need to reduce their debt obligations to apply for a maximum loan amount.
Consider an Existing Lender
Home buyers can consider their existing lenders to make a loan application. If they have paid their previous debts or loans in a disciplined manner, existing lenders can approve a high amount for them. And such loan amounts come with an affordable interest rate.
Choose a longer tenure
Longer tenure is the choice of most borrowers; lenders can consider approving a high-value loan if the tenure is long enough to repay. Borrowers need to pay a loan within the loan term. A longer tenure means enough time to repay the loan amount. This way, you have odds of successful and timely loan repayment in small EMIs. A Home Loan tenure can be as long as 20 years.
Conclusion
Above are the multiple aspects that help borrowers to maximise the Home Loan amount. However, it is necessary to consider that the higher the loan amount, the greater the default risk for the lender. And when that happens, they charge higher House Loan interest rates.
Knowing the loan processing and due diligence can help borrowers to maximise the loan amount and fund a dream house. Buy a home with an affordable loan.
Interest rates are as low as 8.65% with leading banks. Customers should use an online loan eligibility calculator to know “how much Home Loan can I get” and apply accordingly.
Source: Know How You Can Avail The Maximum Amount For A Home Loan
