Buying their dream home is usually a milestone for most people. It is also a significant financial decision. Though several people save for it, arranging all the money in one go can be challenging. This is especially true due to today’s skyrocketing property prices. In such cases, applying for a Home Loan to fulfil your dream of homeownership can be a smart move.

Banks usually have specific criteria you need to meet when lending you funds. You need to be aware of the eligibility requirements. You can conveniently check them using the Home Loan eligibility calculator and ensure that your application process is smooth. You can do this conveniently from anywhere and at any time.

By using this tool, you can get an idea of the Loan amount you qualify for when buying a home. You can also take steps to improve your chances if you fall short in terms of the eligibility requirements. Here, we look at a few effective ways to do so.

Minimise your debt

Most banks usually consider your debt-to-income ratio when determining your Home Loan eligibility. This ratio generally weighs the amount of debt you have against your income. If you have a high DTI ratio, it indicates that you may have difficulty repaying the Home Loan.

Hence, reduce your debt by paying off your Personal Loans, Credit Card dues, and other debts.

Maintain a good credit score

Your credit score is one of the critical factors in determining your Home Loan eligibility. A good score reflects your creditworthiness. Banks typically use this score to assess your repayment capacity. Therefore, you need to maintain a good credit score.

Save enough for a down payment

You can borrow the funds at specific Home Loan interest rates and repay the money using smaller equated monthly instalments within a particular duration. When applying for this Loan, saving enough to make a considerable down payment can be a good idea to boost your eligibility.

The down payment is the money you will pay upfront when purchasing a home. Banks generally prefer borrowers who can make a sizeable down payment, as it reduces the Loan amount required and minimises the risk of default.

Ensure a lower Loan-to-value ratio

The Loan-to-value or LTV ratio is the percentage of the property’s value you can borrow as a Home Loan. Opting for a lower ratio reduces the Loan amount and boosts the chances of better terms. You can utilise the Home Loan eligibility calculator to determine the approximate Loan amount you can borrow from the bank.

Select a longer tenure

When you select a longer Loan tenure, you need to pay a lower EMI. It might boost your Home Loan eligibility. However, ensure you choose a tenure that matches your finances.

Conclusion

Now that you know these tips, you can easily consider them when improving your Home Loan eligibility.