Despite home loans being secured in nature, ICICI home loan or other home loan lenders practice caution when assessing the senior citizen’s home loan application. Uncertainty in regard to incomes and the life span of 60 plus individuals make lenders extremely cautious when approving their home loan application. However, for the ones approaching their golden age, availing an ICICI Home Loan or home loan through other lenders is definitely possible if they hold high credibility.
Here, we will list a few of the means for 60 plus individuals to enhance their ICICI home loan eligibility or home loan eligibility, in general for other lenders:
Add in a co-applicant
Uncertainty linked with life span and income constraints is a major reason for ICICI home loan rejection or rejection for home loans offered by other lenders made by 60 plus individuals. One of the prudent ways of overcoming such constraints is to opt for a co-applicant for your ICICI home loan or other lender’s home loan. Note that the co-applicant must be an earning member in the applicant’s family, having a stable income with a strong credit profile. Remember that, as the primary applicant’s age would be high, the offered loan repayment tenure by most of the lenders, including ICICI home loan, might be less.
As the co applicant’s income is even factored in when assessing the loan application, including a co-applicant can enhance the loan approval chances and can even help the applicants to avail the higher loan amount. However, remember any default or delay in home loan repayment holds the chances of negatively impacting the credit score of not just the primary borrower but even the co-borrower.
Opt for a lower LTV (Loan to Value) ratio
LTV ratio refers to the proportion of property’s value that is disbursed in the form of a loan by lenders. The remaining cost of the property requires being funded by the applicant himself in the form of a down payment amount. As per the guidelines by RBI, a home loan’s maximum LTV ratio can go as high as 75 to 90% of the value of a property. The final home loan’s LTV ratio is set based on the lender’s risk assessment as well as the loan amount required by the applicant.
As a lower LTV ratio reduces lender’s credit risk, 60 plus individuals can increase their ICICI Home Loan Eligibility or home loan eligibility for other lenders by providing a higher down payment amount. Opting for a higher down payment automatically lowers the LTV ratio and even reduces the size of the home loan required.
Evaluate your EMI affordability right before submitting a home loan application
Home loan application approval depends upon the lender’s evaluation of the applicant’s EMI affordability. Generally, home loan lenders want their applicant’s EMI involving the existing EMIs as well as new home loan EMIs to be under 60% of the applicant’s monthly income. Thus, as an applicant for a home loan, you require finding out the optimum home loan EMI you are comfortable repaying before submitting the application.
Note that a loan’s EMI is directly dependent upon loan amount, loan repayment tenure and rate of interest. Higher EMI results in shorter repayment tenure & lower interest cost, whereas opting for lower EMI leads to longer tenure as well as higher interest cost. ICICI home loan applicants or applicants of other home loans can simply calculate their EMI through online home loan calculators and adjust their repayment tenure to figure out the optimum repayment tenure basis their repayment capacity. When finding out their optimum EMI, home loan applicants must even factor in their unavoidable expenditure, monthly contribution towards important financial goals and health linked costs. Submitting the application for a home loan after knowing the optimum EMI will increase your chances of home loan approval and lower the probability of EMI defaults owing to tight repayment schedules.
Make sure to have an excellent credit score of 750 and above.
All lenders, including ICICI home loan, factor in the applicant’s credit score when assessing his/her home loan application. Individuals who has a credit score of 750 or more are considered financially responsible, holding high credibility, i.e. reduced risk of any credit default, which directly boost their chances of availing home loan. However, those with a lower credit score of below 750 have higher credit default risk owing to their irresponsible financial behaviour and hold lower chances of getting their home loan application approved. Also, many of the lenders nowadays have begun offering lower interest rates to those with higher scores.
Thus, as an applicant for a home loan, ensure to avail your credit report either from credit bureaus or from online financial markets before submitting your final application for a home loan. Doing this would help you recognize incorrect transactions or errors, if any, in your report, which you can further convey to the bureaus or lenders for correction. A corrected report can automatically lead to a higher credit score and thus enhance your chances of home loan approval at a relatively lower rate of interest.
Additional tips regarding the factors impacting your ICICI home loan eligibility or home loan eligibility in general for other lenders:
Income
It is basically one of the most pivotal factors that home loan lenders consider when determining home loan eligibility. Your home loan eligibility is higher if your annual income is on the higher end simply because you may have higher repayment capacity. Also, your maximum loan amount may be increased if your yearly earnings are high.
Age
The next factor is your age that impacts your eligibility for a home loan considerably and also assists lenders in understanding the loan term. Younger individuals have higher home loan eligibility.
Credit score
All lenders, including ICICI home loan, look at your score to understand your eligibility for a home loan as the score determines your creditworthiness and personal financial behaviour linked with debt repayments.
Debt obligation
In case your debt obligations are high, you may hold lower home loan eligibility chances as the lenders may assume that you might not have the required surplus amount to meet your home loan EMIs.
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