Yes, the Home Loan eligibility depends on your income too. This is because lenders want to make sure you can pay off the loan on time without any defaults.
Home Loan is an unsecured loan that means you do not require any collateral to secure it. Since there is no collateral/ guarantor/ security provided to the lender they depend pretty much on your income source. Besides, if you hold employment at a reputable employer you can be assured of Home Loan eligibility with an appreciable loan amount at affordable interest rate and flexible loan tenure. A stable income source can be your job or a business you run having appreciable turnover for at least three years.
Your income helps lenders to decide how much down-payment you can afford to pay according to the price of the property. Also, as lenders will pay up to 70-80% of the property price as loan it is essential for you to work out how you will manage the remainder amount.
Whether the interest rate on your loan is fixed/ floating you would have to adjust the repayments accordingly. Therefore, ensure to have a stable income throughout the loan cycle so even periods of fluctuating rates do not affect your monthly budget.
Check with your Relationship Manager how your lender lets you repay? Are there any special schemes you can avail to pay off the loan on time.For instance, NBFCs offer the Flexi loan facility. This is a unique feature which lets you utilize the amount required daily from the loan sanctioned. Interest is charged on these daily withdrawals, This lowers your EMI by up to 45% and helps you pay off the principal amount at the end of the tenure.
Read Also: Home Loan Query: Loan Eligibility Depends On Your Income
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.