123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

Are You Eligible For A Home Loan? 3 Factors All Lenders Must Consider

By Author: Aishwarya Mahurkar
Total Articles: 291

All lenders have a list of factors they keep in mind when considering an individual’s home loan application. All applicants do not get their applications accepted. The reason being that, financial institutions only provide loans to applicants who have the ability to repay them on time. The three most important factors that a lender must consider then reviewing a home loan application are:

1. Credit history

A factor that all creditors keep in mind when considering an application is the borrower’s personal as well as business credit. One should always obtain their own credit history before applying for a loan to see what can be done to improve the score if it is low. A bad credit score arises due to consistent late payments and defaults on loan repayments. Creditors avoid offering loans to such applicants as they cannot be relied on to repay the loan provided on time which is a major loss for the creditor. Hence, an applicant must take steps to ensure they have a high credit score.

2. Ability to repay the loan

All creditors require an applicant to provide documents about the amount of salary they earn. An applicant is required to provide documents about his monthly earning to check whether or not they can afford the loan or not. The purchase behavior of an applicant is also taken into consideration. The reason being that even if an applicant earns a reasonable salary if they spend most of it each month they will still not be able to afford the loan. Applicants must try to reduce their monthly expenditure to accommodate the loan repayment. One can also use a home loan eligibility calculator to find out how much loan amount they are eligible for. This can help one plan their finances in advance to ensure no default occurs.

3. Collateral

For most loans, creditors require the applicant to provide collateral. In the case of a home loan, the house purchased is usually put in as collateral by the applicant. This means that if a borrower for certain reasons cannot repay their loan, the financial institution can seize the house and sell it to get back the loan amount. It is for this very reason that an applicant must plan their financials in advance to ensure that no default causes the bank to seize their house.

Applying for a home loan is a decision that must not be taken lightly. It is for this very reason that banks suggest customers to make use of the home loan eligibility calculator provided to find out the loan amount they are eligible for. This allows one to start saving in advance and make a plan to help repay the EMIs each month on time.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the home loan facility. She writes about a variety of topics covering the home loan documents, rates & the uses of home loan eligibility calculators that help to make the best decision.

Total Views: 151Word Count: 501See All articles From Author

Investing / Finance Articles

1. Why Open An Nri Account?
Author: Samantha Kennedy

2. Commercial Mortgage Loan
Author: Loansa Assit

3. Why Perform A Fundamental Analysis Of A Company?
Author: Aastha Kapoor

4. Open Online Trading Account With The Lowest Brokerage Charges
Author: Krutika Sharma

5. Avail Reliable Tax Return Online Australia Services To Get The Job Done Like Never Before
Author: jameslogaa

6. Get Yourself Best Sip Plans For Long Term
Author: Jignesh Shah

7. Equity Linked Saving Schemes (elss)
Author: Tanvi Sherzade

8. Basics Of Mutual Funds
Author: Tanvi Sherzade

9. 5 Most Critical Points On Loans For Unemployed With Bad Credit
Author: Ashley Corn

10. Need Vat Consulting? Get Help From Xcel Accounting
Author: aniket vichare

11. Best Stock Tips Provider In India
Author: deepti jain

12. Avail Professional Online Tax Return Services To Get Best Value For Your Money
Author: jameslogaa

13. Buy Financial Services Email List From Demandsteer And Improve Your Sales
Author: Gary

14. Thinks You Must Know Before Outsourcing Accounting And Bookkeeping Services
Author: Friso Krahmer

15. 5 Reasons To Study In India
Author: anaya shroff

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: