Home Loan Tips: Many times, the need to take home at an older age or even senior citizens may have to say. Although the nature of the home loan is considered, even after that, banks follow a very cautious approach while evaluating the home loan application of senior citizens. In such a situation, it is important that if you are planning to take a loan at an older age, then keep your application strong. Here are some such tips which can help senior citizens to improve their chances of getting a home loan.
Lack of income and uncertainty about life span are the two main reasons for rejecting home loan applications made by senior citizens. The best way to overcome this problem is to select a co-applicant ie applicant-applicant for a home loan. The co-applicant should be an earning member of the family of the loan applicant with a stable income and a good credit profile. Since the age of the primary borrowers will be more, the tenure of loans given by most lenders may be reduced.
In addition, the income of the co-applicant is also factored in while evaluating the loan application, so adding the co-applicant increases the chances of passing the loan. Apart from this, the possibility of getting more loans increases. However, any delay or default in repaying the home loan will have a negative impact on the credit score of the co-applicant along with the primary borrower.
Loan value ratio
The loan to value (LTV) ratio is the ratio of the cost of the property that is accepted by the lenders as a loan. The remaining cost of the property should be financed by the borrower as a down payment. According to RBI guidelines, the maximum LTV ratio of home loan can go up to 75-90 percent of the cost of the property.
Since lower LTV ratio reduces the credit risk for the lender, senior citizens can increase their home loan eligibility by paying more down payment. Making more down payment will automatically reduce the LTV ratio as well as the required loan amount. The size will also be reduced.
See how much EMI can give
Approval of your home loan application will depend on your ability to bear the EMI, assessed by the lender. Home lenders need the EMI of the applicant, in which the EMI of the new home loan and any existing EMI should be 50-55 per cent of the net monthly income of the applicant. Therefore, before applying the home loan applicant should see how much EMI he can pay. While ascertaining this, the applicant should look for monthly contributions towards his / her urgent expenses, health-related expenses and important financial goals.
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Maintain a good credit score
Lenders definitely consider your credit score while evaluating your application. People with credit scores of 750 and above are considered to be financially disciplined. Now many banks have started offering low lending rates for people with high credit scores.