Buying your house which you can call your own is a dream-come-true for many. Buying a home for your family can be exhausting and tricky, considering the huge investment required. It is essential that you pay about 20-25% of the market value of the property as down payment and then apply for a loan from any bank for the rest of the 75-80% of the property value.

The banks will approve your loan application only if they are convinced that you will be able to repay the loan on time and you can do so. They also ensure that your home loan EMI does not exceed 50% of your monthly household income.

How to Calculate Home Loan Eligibility?

There are several factors which determine your home loan eligibility. There are several home loan eligibility calculators online which can be used to find out if you are eligible for a home loan or not. The different factors leveraged to calculate an individual’s home loan eligibility are listed here:

1) Age Limit

Some of the banks have a minimum and maximum age limit for every applicant. You have to be within the specified age limit to be eligible for a home loan.

2) Net Monthly Income

The net monthly income must be above the minimum limit, and the fixed obligations must not be over 50% of the income to be eligible for a home loan.

3) Loan Tenure

A maximum of 30 years is allowed for the loan tenure, whereas some banks restrict this period to a maximum of 25 years.

4) Company Employment History

A bank may specify certain conditions with regards to the employment history, the company should not be blacklisted by the bank, or the sector in which you are working may decide your eligibility for a home loan.

5) Co-Applicant

The chances of being eligible for a home loan are much higher when you apply for a loan along with a co-applicant, which may be your direct relative including spouse, parents, siblings, children, etc.

6) CIBIL Score

CIBIL score is one of the factors but the only criteria for a bank to provide you with a home loan. Individuals with a CIBIL score of above 700 have a higher chance of being eligible for a home loan.

7) Current EMIs

Monthly EMIs of existing loans reduces the ability to pay new EMIs. It may be possible to pay off the existing loans and have a higher chance of being eligible for a home loan.

Banks and financial organizations take into consideration these significant factors before declaring you as an eligible candidate for a home loan. Home loan eligibility calculators too, use these factors to determine if you are eligible for a home loan or not.

Learn more about your home loan eligibility here.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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