How to qualify for home loan?

Will I get it? Will I qualify for the loan amount I need? 

Questions, questions, and questions… with no simple answers. Getting home loan approval is not a piece of cake nowadays. Lending institutions/banks go through applications for scrutiny with a fine tooth comb before giving a green signal for your home loan. 

Many people just hear about the lower home prices and drop in current home loan interest rates and hastily make the decision to own a home. However, the process of getting a home loan is slightly different from that of the car loan. As an applicant, you need to identify key differences so that your home loan will get approved. 

Buying a home is somewhat stressful. Further, if you are ill-prepared, then surely it will heighten the anxiety. So, if you do not want to put yourself through this, you need to think from lender’s point of view and edify yourself how to get your loan approved:

• Credit score and credit history: It has a major impact on your home loan approval. High credit scores and good credit history always makes it easy for you to get your home loan approved quickly. You can instantly order credit score and get your credit report. Remember, a credit fraud or low credit score can create hurdles in your mortgage application track. Besides higher credit score requirements, derogatory credit information, missed/delayed payments, can put a full stop on your mortgage approval. Lower your debts and pay your bills on time. This will increase your credit score. If you know your credit report beforehand, you get the time to clean up the record and fix errors in it to keep up a good credit score.
• Income: Your income sources play a key role to determine the amount of loan you are eligible for. Higher income simply spells more chances of you being able to pay the higher liability. In simple words, a person with higher income can pay higher EMI and hence she or he is eligible for a higher loan amount. Criteria are different for salaried, self-employed and business professionals. Different banks/lending institutions have different criteria for eligibility. Furthermore, your profession will also be considered while approving your loan. Banks/loan companies will check if your job comes under risk, negative or stable category and then you will be eligibility will be determined accordingly. Basically, banks/lending institutions seek for the assurance of loan repayment.
• Age: Your age is an important factor for home loan approval, as paying a home loan is a long-term commitment. Thus, at a young age, chances are more to get your home loan approved easily.

Consider Long tenure: your eligibility is increased if you increase your home loan tenure. Remember, Falling within the age criteria does not mean automatic go ahead. There is a maximum limit for some years for which you can take a loan. Maximum tenure limit by the majority of banks/lending institutions is about 20 to 25 years.

It is essential to understand that applying for a home loan is a slightly difficult process. However, with just a little time in research and preparation will let you qualify for the home loan approval at ease. Best of luck!