After getting married, the next significant milestone young couples look forward to is purchasing their dream home. Nowadays, you can opt for a home loan for married couples to sort your finances.
However, the home buying process requires you to make several financial decisions. So, here are a few tips to guide you on this journey.
Decide on a budget
Before setting off on your home hunt, you must decide and stick to a budget. Buying a home is a major financial commitment that requires strategic planning. Having a budget will help you pick the right property and disregard bigger houses outside of your budget.
Also, when planning to take a home loan, a budget will help you decide the amount you need to borrow from the lender as per your affordability. You can use a loan EMI calculator to calculate your EMIs and interest payable and plan for the repayment.
Meet loan eligibility criteria
Before you approach your preferred lending institution, check their loan eligibility criteria. Not fulfilling the specified requirements after applying reduces your loan approval chances. Besides, a rejected loan application can hurt your CIBIL score.
The housing loan eligibility typically includes income, work experience, age, CIBIL score, etc.
Refine your CIBIL score
Maintaining a good CIBIL score is the holy grail when applying for a loan. Why? This is because it helps the lender determine your creditworthiness.
Thus, getting housing loan approval will be easier if you have a high credit score, ideally above 750. As a bonus, you can even secure more attractive interest rates. So, before approaching your lender, take measures to improve your credit score and repayment history. Read the next point to learn how!
Additional Read: How much CIBIL Score Required for Home Loan
Get rid of existing debts
Are you still servicing a student loan, or have your credit card bills due? If yes, clear off the pending debts before applying for a new loan. This boosts your CIBIL score.
What’s more, when you opt for a home loan for newlyweds couples, the lender reviews your debt to income (DTI) ratio. This figure is calculated by dividing your debt payments by your overall income. Here, when a sizeable portion of your total income is spent to make monthly debt repayments, your DTI ratio will be high.
For lenders, a DTI ratio over 35%-40% indicates your inability to pay new EMIs. This debt burden can impact your loan approval chances. Besides, multiple EMIs can take a toll on your future finances.
Consider a joint housing loan
If you and your partner are working professionals, you can opt for a joint home loan for couples. With both your incomes clubbed together, you can qualify for a higher loan amount. It also boosts your loan eligibility, and you can land more lucrative interest rates.
Additional Read: House hunting mistakes to avoid when searching for your dream home
Over to you
If you are looking for a credible financier to turn your dream abode into a reality, choose Tata Capital. Our housing finance offerings are tailored to complement your needs. Use our home loan EMI calculator to figure out your monthly instalments in advance. To know more, connect today.