5 Strategies To Securing A Larger Amount Despite Rising Interest Rates To Improve Home Loan Eligibility

Realizing your goal of house ownership has become more difficult as a result of recent back-to-back increases in repo rates. Rising interest rates have driven up the cost of mortgages and lowered consumers’ maximum loan eligibility. The amount of house loans that borrowers may get against their earnings has been significantly lowered as a result of the recent sharp increase in interest rates. There are methods you may do to increase your eligibility and get a bigger mortgage, however.

Here are five practical methods suggested by financial professionals:

Streamline current debt

Your ability to borrow money may be considerably improved by reducing your fixed obligations to income ratio (FOIR). Before requesting a house loan, pay off any existing obligations, such as credit cards or personal loans, to prove that you have a lower risk profile and can manage a bigger loan. The CEO of BankBazaar.com, Adhil Shetty, offers the following piece of advice: “Lowering your existing debt is crucial in improving your eligibility for a higher home loan amount.”

Take Into Account A Joint Request

Consider submitting a combined loan application if your partner or parent has a reliable source of income to raise the loan amount you are eligible for. If both co-applicants have a solid credit history, combining your wages with theirs might increase your eligibility. This strategy displays shared financial responsibility and may favorably affect the approval of your loan. As stated by Atul Monga, CEO and co-founder of Basic house Loan, “Adding a co-applicant or guarantor with a strong credit history and income can significantly boost your home loan eligibility.”

How to Boost Your Credit Score

Your chances of being approved for a bigger home loan and receiving more benevolent interest rates may both be improved by having a better credit score. Prior to submitting an application for a mortgage, concentrate on raising your credit score as much as you can. In the months before you apply for a loan, be sure to pay your payments on time, get rid of debt, and refrain from applying for any new credit. You may prove to lenders that you handle your credit responsibly by doing so. According to Monga, “Paying off high-interest debt and avoiding new debt can improve your eligibility and increase your chances of securing a larger loan amount.”

Save more to make a larger down payment.

Your ability to get a loan may be improved by increasing your down payment. You may increase your approval by increasing your savings and making a sizeable down payment, which lowers the amount of the loan that must be borrowed. bigger down payments are often seen by lenders as less risky, boosting their readiness to provide a bigger loan. Planning ahead and carefully saving can greatly increase your qualifying for a larger loan amount.

Examine Lenders & Loan Products

There are different qualifying requirements for various lenders and loan programs. It is crucial to weigh your alternatives carefully and evaluate the conditions of loans offered by different financial organizations. Some lenders could provide specialty loan products that are tailored to certain borrower profiles or have more lenient qualifying restrictions. You may find lenders and loan programs that are in line with your financial objectives and increase your chances of getting a bigger home loan by completing in-depth research and getting guidance from financial professionals.