Are you in your 60s and thinking to buy your dream house? With ease in home loan procedure and eligibility criteria, senior citizens nearing retirement or those who have already retired can too avail a loan. Although there are many factors which banks these days took into consideration before approving a home loan application of senior citizens. Still, by following these 5 hassle-free ways, borrowers in their 60s can get their home loan approved:
Go for a co-applicant
In order to increase your chances of approval for a home loan, a senior citizen can apply along with an earning family member as co-applicant. Also, if your co-applicant is your wife or your daughter, then you can attract lower interest rates. Apart from this, if the co-applicant is the joint owner of the property, then both parties can avail tax deductions under Section 24 and Section 80C of the Income Tax Act.
Good credit score
Being a senior citizen does not mean that banks will not evaluate your credit score before approval. A mandatory step in the whole procedure, banks always ask for a good credit score. So it’s necessary to maintain a high credit score which increases your chance of loan approval. Senior citizens should make use of online loan eligibility calculators and visit online marketplaces to check their eligibility and apply for a loan where their chances of getting approved are strong.
Calculate EMI beforehand
With limited source of income, it becomes difficult for senior citizens sometimes to repay the loan amount. So it’s important to evaluate whether you are able to pay monthly EMI or not. Presence of online home loan EMI calculators has highly benefitted many senior loan borrowers in calculating the exact EMIs according to the required loan amount, loan tenure and interest rates applicable. For retirees as well, online EMI calculator tool assists in planning their financial outflow upon taking the home loan. By using the calculator, borrowers can adjust the loan tenure as per the loan amount required and the interest rate, to arrive at an affordable EMI.
Banks provide home loans to senior citizens with the maximum age limit of the borrower being up to 70 years at the end of the loan tenure. It means that those aged 60 and above can get a home loan with a maximum tenure of 10 years. Also, banks also look at the repayment capacity by checking their source of income Such as rental income or pension. So, if you fulfill the above criteria, banks easily approve a lower home loan amounts which a borrower can repay easily.
Lower LTV Ratio
The loan-to-value (LTV) ratio is a ‘financial term’ used by lenders to express the ratio of a loan to the value of an asset purchased. It is a number that describes the size of a loan compared to the value of the property securing the loan. While taking a loan, this value plays an important role as it determines one’s eligibility for loan approval.
In case of Senior citizens, they must opt for a lower LTV ratio as it would decrease the EMI amount, thereby increasing their loan eligibility.