Obtaining a mortgage to purchase a home is probably one of the biggest financial commitments you will ever make in your professional lifetime. Your application can be denied or you might get a loan with a higher IDFC home loan interest rate if you don’t meet even one of the criteria for a home loan.
You must therefore be aware of and keep in mind these typical financial factors that lenders take into account when calculating your eligibility for a mortgage. Your likelihood of having your loan application denied may be decreased if you take the following actions:
Table of Contents
Low or even no credit score
The applicable IDFC home loan interest rate is determined by a person’s credit score, which has recently emerged as one of the most reliable indicators of their creditworthiness. You could consult Indiabulls about the significance of your credit score and whether your existing credit score qualifies you for a mortgage before submitting an application. A high credit score has many advantages, one of which is that it demonstrates a history of prompt credit payback. Because of this, the borrower has a higher chance of having their mortgage application approved and more clout when requesting a lower interest rate.
On the other hand, a poor credit score reveals a history of missing payments for mortgage and credit card debts. Your lender might be hesitant to provide you a loan as a result, which could result in your application for a home loan being rejected or having higher IDFC home loan interest rate.
A relatively high percentage of EMi to income ratio
When determining whether you qualify for a house loan and if you can afford to repay it, lenders also consider your EMI to income ratio. Your mortgage will be paid with this amount of your income. Lenders could be hesitant to lend to you if your ratio is greater than 40 to 50 percent. This is due to the fact that a higher EMI to income ratio shows that a substantial portion of your income is going toward paying off debt, which increases the likelihood that you won’t be able to make your remaining payments.
You can prevent having your IDFC first bank home loan application rejected by making sure that your EMI to income ratio is between 40% and 50%. The EMIs for the requested loan are also included in this. You can phone the lender or check their website to see whether you are eligible to apply for a house loan if you are unsure of your EMI to income ratio or if it satisfies the lender’s eligibility requirements. Additionally, if you have a high EMI to income ratio, you run a greater risk of ultimately defaulting on your loan. Since lending to you entails a higher amount of risk, you can be compelled to pay a higher IDFC home loan interest rate.
Borrower’s age not in the lender’s bracket
By chatting with the lender, you can get a better understanding of how crucial it is to take into account both your current age and the age you will be when the mortgage is paid off when determining your eligibility for a home loan. Because they believe that the borrower’s income will be unpredictable or drastically decreased after retirement, lenders often want the IDFC first bank home loan paid off before the borrower retires.
Younger borrowers are more likely to be authorized for a long-term loan of up to 30 years since they have more years left in their working careers than borrowers in their 40s or 50s. Consider adding a co-applicant or attempting a larger down payment if you are nearing retirement to lower the LTV ratio. If you do this, your chances of obtaining a mortgage will increase.
You might wish to consider adding a co-applicant, such as a child or spouse who makes money, to increase your chances of securing a home loan. Because it enhances your eligibility, which is beneficial for your credit profile and improves your chances of getting a home loan overall, this can also help you acquire a low and appealing IDFC home loan interest rate.
Concerns regarding the property
Lenders carefully check the property you pledge because a house loan is secured by the thing you intend to use it for. The lender will consider the property’s age, location, value, and LTV ratio before considering whether to approve your request for a IDFC first bank home loan. The lender will then present you with a mortgage offer. Prior to filling out and submitting the application, ask the lender any questions you might have. By speaking with the lender, you can learn if your property is acceptable for use as mortgage security. Remember that the lender has the right to deny your request for a mortgage if the property does not meet the lender’s requirements for location or has a low remaining age.
Insufficient income to qualify for the loan
Nearly all lenders have a minimum income criterion for customers who want to borrow money while evaluating requests for housing loans. Lenders usually base their decisions on income when approving requests for mortgage loans for homes. Because each city has a different wage scale and cost of living (rural, urban, etc.), these requirements for income may change depending on where the applicant resides. City dwellers might require a larger minimum income than those who reside in rural or semi-rural settings. Applicants with insufficient income may be authorized for a mortgage with a smaller loan amount and a higher interest rate if they meet all other standards but have a poor credit history. Typically, applicants with sufficient income are flatly turned down.
Last but not the least, keep in mind that its a no brainer that housing loans are indeed the biggest financial responsibility you are likely to take ever. So, understanding the above mentioned warning signs can be like a heads up to make the improvements before applying for the loan, right?