Importance of Age, Income & Credit Score while applying for home loans

Home loans are one of the best ways for your home buying. There are top banks and finance companies that offer home loans at lucrative interest rates and flexible repayment options. This retail loan segment is growing at a massive scale with more and more pioneer players offering customized solutions to the borrowers. However, it’s important to get aware of the factors that would determine whether you're eligible for a home loan or not.

It would help in finding out the maximum loan amount you would get across different lenders. Some factors that would come into the picture to calculate your loan eligibility would be your age, income source, repayment capacity, credit history, additional income source, property's age and estimated value in future, etc. Of these, the age, regular flow of income, credit histories are the three crucial factors that would determine your maximum loan limit.

You must be curious to understand, right? So, let’s discuss these three factors in detail that would affect your home loan eligibility:

Age of the home loan applicant

Since the lender would be interested to get comfortable EMIs towards the loan, they would take into account your age. Your age would determine your regular flow of income, whether you would be able to repay the debt on time and decide the loan tenure as well. Lenders would offer home loans to the candidate who would repay the debt before their retirement. Most loan lenders consider 60 years as the retirement age for salaried individual and 65 for a self-employed individual like professionals, businessmen.

Regular Flow of Income

A regular flow of income is yet again a crucial factor to decide the maximum loan eligibility. Before lender grant home loans, they would assess your job type, designation, company reputation, your perks and incentives, additional income source like spouse/parents income and other earnings across different investment. They basically assess your ability to service the home loan repayment with regular and timely repayments of EMIs on due dates. People like freelancers, real estate brokers, businessmen whose flow of income is not so steady might find it difficult to qualify for higher loan limits whereas the ones who work in government firms, MNCs would likely to get higher loan eligibility.

Credit Score & Report

Your credit report will display each and every form of loan you have availed so far, how consistent you are in making repayments and did you ever default on any loan. It helps to build a strong opinion for the lenders about your repayment ability and judge if you can make comfortable repayments of your home loan on time. If your score is below 700 lenders you will be offered loan but higher interest rates and if it’s 750+ you can negotiate with the lenders for some attractive home loan interest rate deals. Experts’ advice to maintain a good credit score at least from one year prior before you plan to apply for home loans.

Hope you would carefully consider these 3 important points and then approach the lender to avail a suitable home loan