A mortgage loan can be applied for by both salaried as well as self-employed professionals. This loan can be used for various purposes such as expanding a business, paying for your child’s education, paying for medical expenses, and so on. Now, lenders take into consideration numerous aspects while evaluating an individual’s application. If you are looking to get a higher loan amount against your property, it is essential to be aware of these factors.
So, take a look at factors that can help in getting a higher amount when you apply for loan against property:
- Apply for the loan with a co-applicant
As a lender, would you prefer giving a loan to an individual borrower or two actively earning co-borrowers? The latter option reduces the lender’s risk of giving a mortgage loan. This is the reason why applying for a mortgage loan with a co-applicant will improve your loan against property eligibility for a higher loan amount.
- Make sure to improve your credit score
One of the most effective ways of getting a higher mortgage loan amount is to improve your credit score. Any financial institution is going to review your CIBIL record before approving the loan. This is because this gives the lender an idea of your defaults, creditworthiness, spending patterns, and so on. A good credit record implies that the applicant is likely to repay the loan without any default, which is why lenders are more likely to approve higher loan amounts to those with good credit scores.
- State any additional sources of income
If you have more than a single source of income, your repayment capacity increases. This is a positive sign for a lender as they can then trust you with a higher mortgage loan amount. This is why it is very important to state any additional sources of income you may have.
- Maintain a low DTI (debt-to-income) ratio
The debt-to-income ratio is a very important aspect that lenders take into consideration while evaluating a loan application. If most of an applicant’s income is getting used up to clear bills of existing debt, it leaves little room to accommodate another loan. This is why you should always make sure to clear any outstanding loans before applying for a loan against property. A low DTI ratio can make lenders trust you with a higher loan amount.
- Avoid multiple loan application rejections
If a lender finds too many loan applications, you can be perceived as someone who is always in need of credit. If your applications have previously been rejected, this is counted as a negative mark for a lender deciding whether to sanction a high loan amount. This is why you should avoid submitting too many applications to lenders.
These factors can help improve your mortgage loan eligibility for a higher loan amount. Also, before getting the loan, it is advisable to make use of a loan against property EMI calculator to make sure the loan plan can be repaid comfortably.