Impact of interest rates on your eligibility
Various home loan customers have been going through chaotic times since the repo rates have been revised 13 times in the last 20 months. This has further confused the home loan applicants. The first and foremost thing that needs to be done before seeking a home loan is to check eligibility.
A person seeking a home loan should be aware of his/her eligibility and the amount which he is titled for. Knowing the eligibility amount will give a home loan seeker a clear idea about the amount of down payment. The down payment will be in the range of 15%-20%.
The impact of change in rates on a person’s eligibility:
Home loan seekers eligibility is based on various factors such as occupation (salaried/self employed), income, interest rate charged by the bank and the tenure of the home loan. Further the interest rate of the loan not only affects the amount of EMI but will also influence the loan amount a person is eligible for. A reduction in the interest rate will make it easier to reach the dream home for a person. This will also increase the loan tenure, eligibility with certain limits.
Most banks do not offer a loan for more than 20 years. It is crucial that a home buyer is not more than 58 years as on the date of last EMI payment. Most of the banks maintain about 80 % to 85% maximum loan to value ratio wherein the total value comprises of the property value, stamp duty and the registration.
However, for calculating eligibility, various banks have their own methods and standards. A home loan seeker should do a certain amount of research to check the list of banks offering higher loan eligibility. One of the best options would be to add up the spouse’s income to increase the eligibility.
It is very important that a home loan seeker should mind his/her dues on credit cards and repayment of other loans. Control all your unwanted expenses and keep your dues on credit cards and other loans to a bare minimum if you are planning to buy a home on loan and are facing the eligibility crisis.
