The majority of people who wish to buy a home today will need to obtain a housing loan in order to achieve their objective of becoming homeowners. If you want your application for a home loan to be granted, you must first ensure that you satisfy all of the loan’s eligibility conditions, such as age, income, credit score, property location, and ability to make payments. Implementing the following tips will increase your eligibility for a home loan involving 50 Lakh Home Loan EMI.
Insufficient downpayment/margin money
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The RBI allows home loan providers to finance between 75 and 90 percent of a property’s worth (referred to as the LTV ratio). This signifies that the borrower is needed to make a down payment of 10–25 percent of the loan amount. Rather than providing only the bare minimum down payment, it is advised to make a larger contribution from your own funds, as this indicates better financial responsibility. Your loan eligibility for 15 Lakh Home Loan EMI will increase, as will the likelihood that your loan application will be approved, to the degree that you make a larger initial commitment to the acquisition of the property in the form of margin money/down payment. Investing in mutual funds through a systematic investment plan (SIP) is an alternative to consider if you wish to amass a larger down payment fund in a timely manner.
Inability to find a co-applicant when required
Numerous factors, including inadequate income, a low credit score, a high debt-to-income ratio, etc., commonly result in the denial of mortgage loans applications. When this occurs, borrowers must take action to enhance their loans eligibility for their following application to be approved. The likelihood of obtaining a mortgage loan might be increased by applying for a dual mortgage with another person. This technique is most successful when the co-applicant has a stable income, a strong credit score, and the ability to repay. The inclusion of a co-applicant in the loan application process may also make it easier to get a greater loan amount. In addition, the majority of lenders offer mortgages with below-average interest rates when a woman is either a co-applicant or the primary borrower.
Tenure not chosen based on an appropriate 50 Lakh Home Loan EMI amount
When borrowers wish to quickly pay off their loans, they usually opt for a shorter repayment period. However, many individuals fail to recognize that shorter loan terms result in a greater 15 Lakh Home Loan EMI. This can have a negative impact on the borrower’s capacity to repay the loan as a result of the increased EMI amount, and it can also affect the borrower’s loan eligibility. Instead, it may be prudent to get a loan with a longer repayment term. The longer the loan duration, the lower your monthly payments will be; this will ensure that the EMIs are proportionate to the borrower’s income.
Even if you have the financial means to pay a higher 15 Lakh Home Loan EMI with a shorter term, it is usually advisable to go for a longer term and then make partial prepayments or pay off the loan whenever you have surplus income. This is because a shorter term will force you to pay more interest over a shorter time frame. Even if the RBI has instructed banks to cease imposing prepayment fees on home loans with variable interest rates, prepayment fees may still be charged on loans with fixed interest rates. Therefore, prior to making a prepayment, you should confirm that the prepayment fees, if applicable, will not prohibit you from realizing the fundamental benefit of prepayment, which is a reduction in the total cost of interest.
The ratio of 50 Lakh Home Loan EMI to income is high.
Lenders evaluate a customer’s loans application based on a variety of significant variables, one of which is the customer’s ratio of 15 Lakh Home Loans EMI to income. It is the proportion of your income that now goes toward repaying mandatory expenses such as loan EMIs and credit card bills. Lenders often see borrowers whose debt-to-income ratios exceed 40 to 50 percent as having a high likelihood of defaulting in the future, as this suggests that a considerable portion of the borrower’s income is going toward repaying their debts. In order to increase your chances of having your loan application accepted and avoid being rejected due to a high ratio of 50 Lakh Home Loan EMI to income, you should limit your FOIR to between 40 and 50 percent. If it is higher, you may want to consider paying off some of your existing debts, preferably those with the highest interest rates, such as a personal loan or credit card balance.
Weak credit profile
When choosing whether or not to approve your application for a home loans for a 15 Lakh Home Loans EMI, lenders will consider your credit score as one of the key indicators of your creditworthiness. Because it reflects responsible financial management, a good credit score considerably increases the likelihood that a loan application will be approved. A good credit score not only increases your eligibility for a loan but also enables you to negotiate a lower interest rate with the financial institution that is giving the loans.
If you are inexperienced with the notion of credit or have a low credit score, you should create a pattern of responsible and consistent credit card use in order to gradually build a decent credit score before applying for a home loan. In addition, if you intend to apply for a combined mortgage, you should be aware that financial institutions assess the credit history of the co-applicant in addition to the credit history of the primary borrower.
So overall, knowing these points will help you ensure you cover these before submitting an application, thus minimizing the chances of getting rejected, at least on these aforementioned grounds. Remember, do your best to ensure your finances are in the best shape so that your approval chances get boosted!
