Financial institutions and NBFCs take into consideration various factors while calculating your Home Loan eligibility. A slight increase or decrease in any of them will directly affect your repayments. Let’s know them here.
# Credit Rating
Maintain or having a good credit score of 750+ or more will help you receive higher loan amount at an affordable rate of interest. However, if your credit score is not up to the mark you can always take measures to improve it but this may take a little time. If you are patient or if you pitch to the right NBFC your chances of getting that desired loan increases.
# Existing Financial Obligations
If your debt to income ratio is close to or more than 30%, have an existing loan, your chances of getting a desirable Home Loan decreases. This is because in a Home Loan you will be required to pay EMIs for the decided tenure and if you have too many obligations you may not be able to pay off the new loan regularly. So, lenders may be reluctant to trust your repayment capacity.
# Income Source
As a loan applicant you must be able to furnish a stable source of income such as a job (for salaried) or business (for self-employed professionals). This is an important factor to win the trust of your lender. Only then will they be able to negotiate a good deal on your Home Loan by trusting your repayment capability.
In addition, you can use an online calculator at lender’s website to calculate the Home Loan. Simply enter net salary, tenure, other monthly income and current EMIs or obligation to check your eligibility.
Also Read: How to Calculate Home Loan Eligibility
