You have always aspired to build a home of your own, haven’t you? Well, several people live by this dream and work very hard to realize it. Home loans are a way to help all such people to pursue their dream of living in their own home. But not everyone is eligible for a home loan. The bank or financial institution will help you only if you are eligible to receive the help. Even when you apply for a loan, you have to keep several factors in mind and prepare your applications accordingly. We are not saying that it guarantees success but it will surely help to improve your chances.
Here is a brief preview of some basic criteria that decides your eligibility for a home loan:
This is one of the most important questions that need to be answered when you apply for a loan. Ideally, the financial institution will study your income and basis the analysis, they will conclude whether or not, you are eligible to pay the EMI’s of the loan that you have applied for.
Improve your credit ranking
If you have more debts on your head, your credit rating drops. This rating is affected even if you are a defaulter. In order to be eligible for a loan, you have to have an excellent credit rating, only then will the bank consider you worthy of lending money.
Authenticate the property
Before entertaining your loan application, the bank will want to know about the property. For example, there are certain developers and builders who are blacklisted by financial institutions. If your home or property has anything to do with them, the bank is most likely to reject your loan.
Fall back assets
The bank is not sitting there to do community service, is it? If they lend you money, they want to be absolutely confident that the repayment will happen. So, even in cases where the applicant is unable to pay, the bank uses his or her assets. Therefore, when you are applying, you must be able to show sufficient assets to fall back on.
Usually, people who have retired from active service are not eligible for home loans. This is because they are not expected to have the ability to pay back massive amounts. However, in cases where the individual is able to show sufficient assets and a stable source of income, the bank may make an exception.
These are just generic criteria, for more details, it is best advised to ask the bank officials for the eligibility rules at the time of applying for the home loan.