By Ratan Chaudhary
Despite the secured nature of house loans, lenders comply with a cautious method even though evaluating house loan applications of senior citizens. Here are some indicates that can assist senior citizens enhance the possibility of securing a house loan.
Include a co-applicant
Income constraints and uncertainty in life span are major motives for rejection of house loan applications produced by senior citizens. One of the greatest techniques to overcome these constraints is to pick a co-applicant for house loan. The co-applicant need to be an earning member of the loan applicant’s loved ones, with a steady earnings and much better credit profile. As the major borrower’s age would be higher, the loan tenure provided by most lenders may possibly be much less.
Also, offered that the earnings of the co-applicant is also factored in even though evaluating the loan application, adding a co-applicant can boost the probabilities of loan approval and also help the borrower in receiving a larger loan quantity. However, any delay or default in house loan repayment would have a damaging influence on credit scores of each the major borrower and co-borrower.
Go for reduced Loan to Value ratio
Loan to worth (LTV) ratio is the proportion of the property’s expense that is sanctioned as loan by lenders. The rest of the property’s expense has to be financed by the borrower in the kind of down payment. According to RBI recommendations, the maximum LTV ratio of a house loan can go up to 75-90% of the property’s expense.
As a reduced LTV ratio reduces the credit danger for the lender, senior citizens can boost their house loan eligibility by contributing a larger down payment.
Making larger down payment would automatically lessen the LTV ratio as nicely as reduced the size of loan quantity essential.
Assess your EMI affordability
The approval of your house loan application will rely on the lender’s assessment of your EMI affordability. Home lenders demand the applicant’s EMIs, such as the EMI of the new house loan and any current EMIs to be inside 50-55% of applicant’s net month-to-month earnings. Hence, house loan applicant requires to come across his optimum house loan EMI accordingly ahead of applying for the loan. While discovering out the optimum EMI, the loan applicant need to element in his unavoidable costs, overall health-connected fees and month-to-month contributions towards vital economic objectives. Making a house loan application following discovering the optimum EMI will boost the probabilities of approval and lessen probabilities of EMI defaults due to unplanned aggressive repayment schedules.
Maintain a fantastic credit score
Lenders will take into consideration your credit score even though evaluating your application. Those with credit scores of 750 and above are noticed as financially disciplined and therefore, with reduced danger of credit default. Many lenders have began to present reduced lending prices for these getting larger credit score.
The writer is head, Home Loans, Paisabazaar.com