3 Factors That Affect Home Loan TenureJune 15, 2018
The two factors that contribute heavily to home loans are the amount and the tenure of the home loan. These factors are also correlated as higher the home loan tenure, the higher the amount and the eligibility. Most home loans have a higher tenure of 20 to 30 years, but it can also depend upon various factors.
Here are the 3 major factors that decide the home loan tenure
1.Age and income
The income determines the borrower’s ability for home loans. Also, the age of the borrower is also a contributing factor to overall loan amount eligibility. For salaried applicants, 60 years is considered as the retirement age and the maximum loan tenure is calculated based on the remaining years of service.
2. Age of property
As the property is pledged as security for obtaining the home loan, the age of the property is also a determining factor. The tenure of the loan is calculated based on the residual life of the property and it cannot be longer than the age of the building. If the tenure is lesser than the property age, there is a risk of the lender losing his security if the property is destroyed.
3. Leasehold properties
If the property is constructed on a leasehold land, the loan tenure cannot be more than the lease period. Even though if the property is in good condition, the lender will not risk losing the security when the lease is renewed.
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