You can turn your dream of having your own house into reality, even if you’re nearing retirement or have already retired. So we can called this Home Loan For Pensioners. With home loan eligibility requirements getting less restrictive and broader, it is never too late to borrow a home loan.
Although these are secured loans, age and financial status of senior citizens make lenders extra careful towards lending them.
Here are some points borrowers need to keep in mind to get a home loan approved in their 60s.
Shorter loan tenure and lower loan amount:
It is not easy to get a Home Loan in your 60s. However, some lenders offer home loans to senior citizens, with the maximum age limit of the applicant being 70 years to pay off the loan, implying that whose age is 60 years and above can get a home loan with a maximum tenure of 10 years. Thus, they will get shorter tenures and lower loan amounts than lower age groups.
However, lenders may prefer income sources, like rental income as the primary income, over pension while assessing a senior citizen’s loan application.
Apply for a joint home loan:
Availing a home loan at the advanced age of 60s is not as easy as when you are younger, largely due to shorter life expectancy and income constraints. You should consider opting for a joint loan with a younger earning member as the co-applicant to boost the chances of your home loan application getting approved.
Making a woman the principal loan holder would attract Lower Interest Rates.
Please remember that repayment capacity of the borrower and co-applicant is considered before the loan approval. Lenders use your FOIR (Fixed obligation to income ratio), i.e. considering that 50% of your income is already being used for your living and thus your monthly loan obligation/liability should be within 50% of your monthly income, to determine your repayment capacity.
Make sure your co-applicant’s FOIR isn’t more than 50% to improve chances of your home loan application getting approved.
Avoid hurting your Credit Score:
Credit score is a decisive factor for a home loan approval. Lenders use your credit score to check your credit profile. Multiple loan applications can harm your credit score in your 60s even if you had been maintaining a good credit score and managing your repayments in a disciplined manner.
To avoid this, borrowers should visit online marketplace and use online eligibility calculators to check their eligibility and apply for a loan where chances of approval are high.
Use online EMI calculator to ensure affordable EMI:
Online EMI calculator helps in calculating the exact EMIs according to the required loan amount, interest rates and repayment tenures. It will also assist those aged above 60 in planning their cash outflow after taking the home loan.
Borrowers can adjust the loan tenure in accordance with loan amount and interest rate by using online EMI calculator to ensure an affordable EMI. Hence, this will help the senior citizens to prepare for the loan repayment in the form of EMI.
Opt for lower loan to value (LTV) ratio for smaller EMI payout and improved loan eligibility:
Loan to value (LTV) ratio is the proportion of house/property’s value financed by the lender in the form of loan. For example, if the total market value of the property/house is 2 crore and the lenders agree to offer Rs. 1.2 crore in the form of loan, the LTV ratio would be 60%.
If borrowers opt for a lower LTV ratio, which means he or she would be required to pay a bigger proportion of the house/property’s value, resulting in lower loan amount required. A lower LTV ratio would decrease the EMI amount and thereby improving the eligibility of senior citizen. For more information about home loan, you can go over to home loan page on Afinoz.com.
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