Chances are that if you’re looking for a new property this festive season, you’re also looking for a workable home loan option that supports your desire to buy a new home without breaking a sweat. hole in your savings. It is an achievable feat if you invest the right effort in downsizing and selecting the appropriate lender for yourself. However, many home loan aspirants find themselves clueless early on, not knowing what parameters to consider when researching their home loan options.
Home loan seekers should understand that while home financing is intended to simplify the process of home ownership, by allowing you to access a significant line of credit to support your home buying budget, it is This is a considerable financial obligation that can often span decades. . To follow a long-term repayment plan without jeopardizing your finances or other investment plans, it is important that your mortgage application is in line with your repayment capacity – its accessibility being of the utmost importance for your future as a mortgage borrower.
In this article, we explore how aspiring home loan borrowers can affirm the viability and affordability of their home loan offer before applying – ensuring they make the right financial choice that gets approved without any hassle – considering its high eligibility compatibility.
Factors That Determine Home Loan Affordability
Naturally, the affordability of your home loan is directly related to your sources of income and your current obligations, but these are not the only aspects taken into account when taking stock. Here are some of the factors that help assess the feasibility of your home loan.
● Applicant’s age: Applicant’s age is not a direct indicator of their ability to repay because an individual’s financial stability differs from case to case – and cannot be a general judgment related to age. However, lenders prefer younger applicants in a certain age bracket with a longer term of work ahead of them. This could imply that older claimants nearing retirement might not be able to commit to a long-term repayment plan if their future income prospects are not as bright. Be sure to consider your age when
determine the right amount of the mortgage.
● Income and stability: This directly contributes to your ability to repay and therefore the affordability of your home loan. The amount you earn each month, the stability of that income, and your other sources of income determine how viable it will be for you to repay a loan of the amount you want.
● Debt to income ratio: Even if your monthly income is sufficient, concerns about your ability to repay will not stop there. Lenders also consider your outstanding debts and other bills you are required to pay, calculating the feasibility of EMI from your balance.
Monthly Budget. If you are already handling other large loans or are responsible for more bills, this could deter lenders from granting you a large sum, given the limited availability of your funds. Make sure you don’t bite off more than you can chew – because paying
Home loan EMIs to the detriment of your family’s finances are not advisable in the long term.
How to determine the right amount of the mortgage?
One can rely on instinct and manual calculations to determine their ideal home loan amount, but nothing can insulate them against unpleasant surprises, such as a home loan rejection, like a home loan EMI calculator. Here’s how using an EMI calculator can help:
● Anticipate your future EMI amount
● Help with pre-planning for repayments
● Optimize your mortgage eligibility
● Avoid mortgage denials
The tool is hosted online and free for everyone on the internet, with no limitation on the number of times it can be used. Although each calculator construction may differ in terms of how it works, basically it can be used by following these steps:
1. Enter the amount of your desired home loan
2. Enter your preferred repayment term
3. Enter the current mortgage interest rate
Based on the information you enter, the calculator projects your provisional EMI amount and even shows you an expected repayment schedule, which can help you plan your repayment pitch before applying for your home loan.
Subscribe to our newsletter