Purchasing a home requires strategic thinking and precision planning. As an applicant one would need to consider all the different influential factors that take place in the processing of a home loan. This also includes the list of factors that determine the approval for a home loan, which includes the home loan eligibility. These factors determine the eligibility criteria for any home loan application include:
Assessment of property
Property plays an important role in the eligibility criteria of a loan. Since the value of the property influences the value of the loan, one would need to assess the value of the property before the loan application. The interest rates and EMI's of a loan are affected by this factor alone. On selecting the ideal property, the loan applicant will need asses the property value and determine the ideal repayment plan, which include the interest rates, repayment tenure and even the principle amount.
Income plays an important factor in determining the home loan eligibility of an applicant. An applicant's income determines how much one can set aside to repay the loan or EMI's. It also determines whether the applicant will be able to manage the repayment within the given time frame. It is one of the main factors that are considered by any financial institute. Therefore, higher the income, higher is the interest rates and EMI's.
Profession or nature of business
Apart from the income, one's place of employment is also taken into consideration, as the source of income. If the applicant is an employment field that follows a proper corporate structure or banks, finance or private limited companies your loan eligibility will be high. Employment fields like finance, medical and engineering will be considerably higher as compared to media based. The home loan eligibility is also applicable to applicants who are self-employed, as their come would be based on their functioning of the business or venture they own.
Home loans come with a repayment tenure that lasts between 15 years to 30 years. One can opt for a repayment tenure that is most convenient to them. However the applicant must remember, that once they apply for this loan, it is difficult to apply for any additional loans. A longer repayment tenure would increase the home loan eligibility, for the same income value.
Co - applicant
Most home loans are designed for the features of a single individual. However, if the financial institute undermines the applicant's profile, one can always opt for a joint application for the loan. A joint income increases the repayment factor by twofold, thus ensuring a higher chance for the loan eligibility.