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Few Myths About Housing Loan Eligibility - Exposed!
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Home loans seem like a great ladder to your dream home. But, this path is not easy. Some first-time borrowers receive it as a rude shock with a home loan rejection letter. Invest your time and energy in understanding home loan eligibility to buy your dream home. Home loan eligibility involves more than a housing loan eligibility calculator. So, let’s debunk few commonly known myths about housing loan eligibility.
Myth no. 1: High income means home loan approval
You have more than enough resources to pay home loan EMI today. That is great news for a borrower and a lender. However, it isn’t enough. How many dependents do you have? How many loans are you currently repaying? What is your debt to income ratio? Did you default on any loan? A housing loan is a financial commitment for next 20 to 30 years. So, you present income is a part of the big picture. Any housing finance company understands that and so should you.
Myth no. 2: High credit score means housing loan approval
House loan approval criteria are different in each organization. Therefore, a high credit score may impress few lenders. But it is not enough. High credit score is one of the many criteria for housing finance approval. This is especially relevant for people seeking the best home loans in India. To avail the lowest housing loan rates, you need to represent excellent repayment ability. It can be demanding since you cannot control all facets of repayment ability. i.e. age, employer, security of income, etc. However, you can put your best foot forward when you submit your housing finance application with:
• Low debt to income ratio
• Consistent repayments of current loans
• Consistent payment of utility bills, insurance premiums, etc.
• Sufficient amount of investments
• Secure source of income for you and/or your co-applicants
• A reliable guarantor
Myth no. 3: Minimal or zero usage of credit is a valid reason for approval
Housing finance industry in India does not view people without a credit card or a personal loan favorably. In fact, good credit practices improve credit score. It demonstrates your ability to avail a credit responsibly. But, your credit card usage needs to be red flag free too. Build a decent credit history with a credit card. It will go a long way in your house loan approval.
In simple words, house loan approval is all about the big picture. You need to get smaller details right. But, a single factor will not lead to house loan approval. Your chances to avail the best home loan in India depend on presenting a right big picture. So, consult with right experts and work on all aspects of your housing finance application. Minor documents required for a home loan are especially relevant in availing a great home loan in India. So, all the best!
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