Getting a home loan application approved is a rigorous process, even for young, working individuals. But for senior citizens and pensioners, it can be even more challenging.
Lenders are reluctant to sanction a home loan for pensionersbecause of their limited income and life expectancy. But there are ways in which pensioners can get their housing loans approved. Read below to learn everything you need to know about how you can avail of housing finance as a pensioner.
Apply with a co-applicant
When it comes to sanctioning a home loan for retired persons, the primary concern that most lenders have is the uncertainty surrounding their income. You can resolve this issue by applying jointly with another earning member of your family. Preferably, this person should be younger, must have a steady income and a good credit profile.
Not only will this help your chances of getting a home loan after retirement, but it can also make you eligible for a higher loan amount, and increased tax benefits. Also, if your co-applicant is a woman (your wife or daughter), then the interest rate applicable could be lower.
Additional Read: – Home Loan Benefits to Women in India
Pay a higher down payment
The down payment is the amount that you pay out of your own pocket. A higher down payment makes for a lower LTV ratio. LTV or Loan-to-Value ratio is the proportion of the property’s value, which is paid for by way of a loan. As per the latest RBI guidelines, the maximum LTV ratio can be between 75% and 90%, depending on the cost of the property.
If you pay a higher down payment, the LTV ratio automatically gets lowered, as does the loan amount that you require. Lenders feel more confident in disbursing smaller loans to pensioners. Therefore, you have a better chance of getting your loan application approved.
You can use an online calculator for housing loans for more clarity on Loan-to-Value ratios and home loan rates.
Additional Read: – Tips to Reduce Home Loan EMI
Do your research
Putting all your eggs in one basket is never a good idea, but this might be the only exception. If you apply for a loan with too many lenders, and if they are not satisfied with your credit score or your repayment capacity, they will all turn down your application. That will further damage your credit score, making it harder for you to get a loan again.
Therefore, before you apply, visit a lender’s website and check whether you meet their home loan eligibility criteria. See if your credit score is more than their minimum requirement. Because if it is not, then there is no point in applying and getting your application rejected.
You can also use an online home loan EMI calculator to evaluate your repayment capacity, explore different repayment options, and then apply accordingly.
Further, if you are a pensioner, you can get a housing loan at Tata Capital without any hassle. We offer attractive home loan interest rates and flexible repayment options.
To check your eligibility, you can visit our website and use our online home loan eligibility calculator. So, don’t wait any longer. Get in touch with us today to start your application process.