No other experience comes close to that of moving into your own home, especially after facing the woes of rental living for years. And, since Chennai is a rapidly developing city, the cost of apartments is pretty high in this city. However, easy homes loans have made it a breeze to fund a property purchase.
But, before you apply, know about the various eligibility factors that affect a home loan in Chennai.
CIBIL or credit score
Perhaps the single most crucial factor in determining home loan eligibility is your CIBIL or credit score. Your CIBIL score will take into account factors such as your repayment history, your dues (other loans and credit card dues), and the kind of debt you have borrowed in the past, etc. Remember, a CIBIL score of 750 or above is ideal. Lenders may even be willing to offer low home loan interest rates to those whose credit score is high.
And if your CIBIL score is not high, lenders may charge high home loan rates or altogether turn down your application.
Employment and income stability
Income is another essential home loan eligibility factor, and given Chennai is an expensive city, this factor becomes even more critical. For salaried individuals, the same is equivalent to their employment status. Lenders are willing to extend home loans to low-risk borrowers – whose employment or source of income is stable. Having a history of job-hopping and a highly uncertain business will present you as a high-risk borrower in the eyes of your lender. As a result, your housing loan application may be declined.
Since home loans are a significant financial commitment, lenders factor all other home loan eligibility criteria alongside your age. This is to determine the number of years you have with you to repay your home loan. If you apply for home loan decades before your retirement, say, in your late 20s or early 30s, lenders will quickly sanction your loan as these are generally the prime years of your career. Higher home loan accessibility gradually declines with age.
The property for which you are taking a home loan online is also a matter of concern for lenders since it is the security against which your loan is to be sanctioned. As such, lenders will be willing to approve a higher home loan amount for high-value property, and vice-versa for a low-value property. This is something the lender determines during the home inspection process.
To improve your home loan eligibility, ensure that you keep a clean credit record by closing all existing dues and debt, opt for a higher down payment if you can afford, choose a long tenure. But, do remember a longer tenure means higher home loan interest outgo, and if possible, apply with a financially strong co-applicant.
For a smart decision, use free online home loan eligibility calculator and home loan EMI calculator. As exciting as buying a house is, it is also life’s most significant investment and hence, requires proper planning and preparation.