Home loan interest rates have fallen sharply in recent times and this may be a good time for you to think about making your dream of a home come true. If you are considering applying for a home loan, this blog can be your guide to understanding what factors will affect your home loan eligibility. Being aware of them in advance can help you prepare well and ensure that your application gets sanctioned faster.

#1 Age: The period for which you borrow a home loan from a bank or housing finance company is called tenor. Your age plays an important role when it comes to fixing your home loan tenure. For instance, the capacity of an individual in their early thirties to pay back the home loan can be higher than that of a person in their late fifties because of different financial responsibilities arising during different periods of life. Both housing finance companies and banks consider these points while determining your eligibility.

So, the younger you are when you apply for a loan, the better your chances are of getting it approved. The chances of getting loans at better interest rates and of a higher value are also high when you apply for them at a younger age.

#2 Credit Score: Your credit score gives visibility of your financial history to banks or housing finance companies. It helps them understand the way you handle liabilities and also to determine your creditworthiness. A credit score ranging between 650 to 749 is considered healthy by financial institutions for offering you any form of loan, whether it is a home loan, home extension loan, home construction loan, home renovation loan, or plot purchase loan.

Maintaining a good credit score and meeting other criteria as decided by the lenders, increase your chances of loan approval. Higher the credit score, the higher the chances of getting a home loan at a competitive interest rate.

#3 Income: Most banks and housing finance companies have specific income criteria based on your profession and employment nature, which you need to fulfill to be eligible for a home loan. Having a steady source of income matters while applying for a home loan, as financial institutions want to be convinced of your repayment abilities.

The better your income, the higher will be the home loan amount and lower will be the interest rate that lenders will offer you. In the case of salaried individuals, financial institutions may also want to look at salary slips over the last six months, and those in business will have to produce their Income Tax (IT) returns for three years. If you are an entrepreneur or a self-employed professional, you will have to show that your business generates a steady income. Before you apply for a loan, ensure that these relevant documents are in order.

#4 Employment Status: As much as your income matters, your employment status, too, plays an important role in determining your eligibility. If you are employed at a credible private or public sector organization, your chances of getting a home loan are high since financial institutions consider you to be a reliable borrower with a stable source of income.

#5 Number of Applicants: Your chances of getting a home loan are far higher if there is a co-applicant who applies for the loan with you. The reason is that the lender takes into consideration the total income of both applicants. To know more about co-applicants, read our detailed blog on co-applicants.

#6 Existing Debts: Both banks and housing finance companies also consider your current debts and loan repayment history while going over your application. While you can have multiple loans in your name for meeting various requirements, it is crucial to pay off the installments regularly to be able to secure additional and new loans.

DMI Housing Finance offers flexible EMI options, long loan tenure, and affordable home loan facilities! We have 37+ branches across various cities and states in the country. So, for the best home loan in Kalyan, Virar, Lucknow, Jaipur, Delhi, and more, let DMI Housing Finance be your lender of choice!

You can use our branch locator to find a branch closest to your home. If you want to apply for a home loan online, you can visit the DMI customer portal today and choose a loan plan as per your requirements.

For any questions, you can also call us on 18001214214 or write to us at customercare@dmihousingfinance.in. For a new home loan, give us a missed call on 9772027704.