Home loans: Factors other than your income, credit history lenders consider before giving you a home loan

economictimes.indiatimes.com:

home loan.

Here is a look at four factors that can act as spoilers for home loan applicants.

Also read: Home loan interest rates comparison: Public vs private sector bank; which is offering better home loan rate?

1. Borrower's age and income

Home loan eligibility is calculated on the basis of the income of the applicant and the number of working years left. For instance, a 50-year-old earning Rs 1.5 lakh a month could be eligible for a home loan of Rs 60 lakh, however, a 30-year-old earning the same amount is eligible for a loan of Rs 94 lakh. This is because the 30-year-old applicant has 20 more years to repay the loan.
Since a home loan is a long-term loan, i.e., at least 20-25 year-long contract, lenders need to be sure of your repayment capability. Lenders prefer applicants employed with a particular firm for at least a year, say experts. This is why it might be a little difficult for first-time entrepreneurs to get a loan. Those working for firms with less than 50 employees also face difficulty. Did you know that some banks do not even lend to media professionals, lawyers and policemen?

Also read: How banks evaluate self-employed borrowers for giving home loan

2. Making too many enquiries

Making too many enquiries for a home loan could reduce your chances of getting one. To the lender would look like nobody is ready to lend to you and this lowers your credit score, even if you have not availed of any loan. Every time you enquire about a loan with a bank, the bank checks your credit score with a credit bureau. This is considered to be an enquiry and you are termed «credit-hungry», even if you were only shopping around for the best deal. Remember, each