Factors That Influence The Home Loan AmountApril 4, 2018
An application for a home loan will only be considered after close scrutiny of various financial factors to ensure repayment. This also include the evaluation of the loan amount applied for to determine if the same will affordable by the applicant during repayment.
Here are some of the factors that influence the home loan amount.
Income is the primary factor that determines home loan eligibility. When the income level is high, banks considers a higher proportion of income devoted for repayment. Also, the evaluation criteria is different for salaried and self-employed applicants.
2. Existing loan
When calculating the home loan eligibility, banks will subtract existing EMIs from the proportion of income devoted for repayment of the new loan. And hence there are chances for the eligibility to be cut short to a reduced amount.
3. Age and remaining service years
If the applicant’s age is more than 40 years, the remaining years of service is considered less than 20 years and so the eligibility can be reduced accordingly. The more the years of service remaining, the higher chances of a long tenure loan with high loan amount.
4. Home loan tenure
The loan eligibility is higher with longer tenure home loans. It also offers better flexibility with the availability of floating rates of interest. In case of surplus funds, the loans can be repaid partly or completely at any time.
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