5 Ways to Improve Your Eligibility for Home Loans
Are you planning on purchasing a home? Then you need to consider that not everyone is eligible for a home loan, and if you do not take the appropriate steps ahead of time, you could end up very disappointed with the type of loan that you qualify for. So check out the five helpful tips below that will assist you in improving your eligibility for a home loan so you can purchase the house of your dreams.
1. Prove That You Have a Steady Source of Income
When you apply for a home loan, the lender will want to rest assured that you will have the steady employment necessary to make your monthly mortgage payments. Therefore, you need to report your income accurately. It is also best to include all of the sources of income that you and your spouse or partner have, including incentives and perks that are performance based. In this way, you can show that you make enough money to qualify for a higher loan amount. If you do not have a job at the moment, you can use an employment agency like Resource Employment to find a suitable position.
2. Apply for a Home Loan with Your Spouse or a Parent
If you apply for a home loan with a parent or your spouse, you can essentially pool your income with theirs and increase your chances of getting a home loan that works for your needs. If you are in your early to mid 20s, your age may also work against you, but applying with your parents could help.
3. Pay Off Existing Loans
Another way to make yourself more eligible for a home loan is by paying off, or at least reducing, any other existing loans that you may have, such as personal loans or car loans. These could negatively affect your home loan eligibility because you will have a lot of outstanding debt that will work against you. And don’t forget to get rid of your credit card debt as well before you apply for a home loan.
4. Consider a Step-Up Loan
A step-up loan is one in which you would pay a reduced EMI (equated monthly installment) in the early part of the loan before you start paying a higher amount later on. So, for example, if you take out a $1,000,000 loan, you may pay around $7,000 for the first couple of years before going on to pay around $8,000 for the remainder of the life of the loan.
5. Get a Loan with a Longer Term
Finally, if you opt for a loan that has a longer term, you could boost your eligibility for it. As the loan’s tenure increases, the EMI will decrease, and your ability to pay the loan will thereby increase, along with your eligibility.
These are just five of the best ways that you can improve your eligibility for a home loan. Once you have your loan amount in place, you will be able to shop for the house that you can really afford.