Blog: 1
Important Factors that Decide Eligibility for Home Loan Buying a home is the most important milestone in the life of every working individual. There are many people who spend their whole life in making money so that they can buy a home. From an emotional attachment to a financial support, a house is more than an important asset. In India, home loans are an essential part of the home buying process. However, the eligibility for a home loan depends on certain factors. Here are some factors that decide eligibility for a home loan for a salaried person. Income: The home loan amount you can avail from the lender is directly related to your income. For lenders, the higher your monthly income is, the lower the chances of defaulting. There is a simple logic behind it. A person who is earning more can easily pay off the loan amount. For instance, a person who is earning Rs. 1 Lakh every month is more capable of paying Rs. 40,000 EMI every month as compared to a person earning Rs. 60,000. One notable point is that stability in salary is important. This is one of the reasons why salaried people are valued more than business owners and selfemployed. Age: Another factor that decides your home loan eligibility is your age. For instance, a salaried person who is 28-29 years old is expected to be salaried for at least 30 more years. This means he or she will have enough time to pay off the amount. On the other hand, a person who is between 45-55 years of age is likely to get retired in the next 10-15 years, so there are chances of losing the sources of regular income. Therefore, a younger applicant is eligible for a better amount as compared to an old applicant. To check your maximum loan eligibility, you can use online tools as well. Credit History: Your past credit history has a direct impact on your home loan eligibility. The pattern of borrowing money and paying off the amount help you build a credit history. Your CIBIL score or credit rating defines your credit history. So, to avail the desired amount of home loan, it is important to pay off all your debts on time. You can research online to know more about credit score and home loan balance transfer offers.