When you apply for a home loan, the financial organisations thoroughly assess your eligibility before approving the request. The lenders determine the maximum amount you can borrow, and the interest rate based on your financial and credit profile; they verify your income level, occupation, income stability, credit history and score, etc. If you fall short of the lender’s eligibility requirement, you need not panic. You can easily increase the eligibility by following the below tips.
- Apply for a joint home loan
One of the most effective ways to increase your home loan eligibility is to apply for a joint home loan with a family member who has steady income. By adding a co-applicant, you can enhance the maximum amount you can borrow as the lender will consider both the applicants’ income while determining the eligibility and repayment capacity.
- Maintain a high credit score
Credit score is a three-digit number ranging from 0-900 that reflects your creditworthiness. It is a critical determinant of your repayment capacity. The higher your credit score and closer to 900, the better your chances are to get the loan sanctioned without any hassles.
So, before you apply for a home loan, it is advisable to check your credit score online and maintain a score of 750 or more for a few months before initiating the loan application process. This will help you get the approval faster. Also, based on your high credit score, chances are high that the lender may offer you better home loans rates.
- Repay your dues
Repaying the debts like credit card bills, car or personal loan diligently helps build your credit score and in turn it builds a reputation of being a trustworthy and responsible borrower. So, if you have repaid your past dues on time, it can hold you in good stead while applying for a home loan. It increases your home loan eligibility to borrow a higher amount than you may need.
- Declare your other income sources
When any financial organisation sanctions your home loan request, one of the important things they consider is whether you have enough financial resources to repay the full amount within the loan term.
So, if you have any additional income sources, other than salary like rent from property, dividends from investments, business income, etc. you can furnish the details of the same to showcase your strong financial standing and repayment capacity. This will help you increase your eligibility and get a higher loan amount.
- Choose a longer repayment term
This is one of the simplest ways to increase your home loan eligibility. When you choose a longer tenure, it has a direct impact on the affordability as the EMI becomes lower. This means you are more likely to repay the amount on time. For lenders, this will appear as a low risk in lending you the money. However, you must know that by increasing the repayment term, you may have to pay a higher interest in the long run.
- Establish a relationship with the lender
If you have availed of a personal loan or a car loan with a specific lender and have repaid the amount before, you can consider taking a home loan with the same lender. This may help you get brownie points for loyalty, and you may get your eligibility increased.
Now that you are aware of the different ways to increase your home loan eligibility, use them to your advantage and enjoy a hassle-free borrowing experience.
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