While opting for home loans, home loan eligibility amount is covered underneath holding ample suspense within. But according to a buyer it’s like eagerly awaited exam result or some kind of secret recipe which calls for early dismissal. There are numerous factors which affect the home loan eligibility amount. My recent edits keep telling about the factors which impact the home loan directly or indirectly.

CIBIL is an important score which ease out the way of grabbing home loan. Here are few tips and tricks which will facilitate increase in eligible amount for home loan. To avoid future shocks one should always apply for pre approved home loan which will help in planning a purchase of property in an easy way. They are

[1] Adjust your salary-purchasing a home calls for long term an investment which is to be met in the limited salary earned by the people. One should always plan in advance about his property purchase. This comprises of home loan as well. The best method of home loan eligible money is to adjust your salary. With the aim of saving tax, an employee should opt for flexible mechanism i.e. allowances and privileges. These two factors undoubtedly reduce the tax, but they don’t comprise of your salary part. One should always keep in mind repayment and income while considering home loan eligibility amount. Perks are not judged as a portion of income.

[2] Though these perks are discarded by the home loan provider no wonder if it does not comprises a part of your income. It is taken for granted that these factors are benefitted against expenditures and eventually not form the part of the CTC. If aiming at home loan in a coming year then you need to adjust your salary. To make it more precise, make your salary non tax friendly so that you can qualify for more amount of home loan eligibility. You should give up all these perks and allowances. No wonder it will boost your tax outflow, but it will also upraise your home loan eligibility amount at the same time.

[3] Reduction in credit use-Credit use is one of the vital factors which tell about the credit worthiness of the person who seeks loan. Hence it plays an important role in fixing the loan amount. Undoubtedly, this cannot be planned over night; perhaps it might take 15-18 months in improving your credit utilization. Credit use depends on the % of total salary which a person takes home to his liabilities, and over drafts. Therefore it should not be more than 60 % of the salary in hand. If you want to upraise your credit worthiness then you have to reduce the utilization of your credits. For this you have to cut down your credit card usage and shutting down of all other credit facilities. Change in salary structure will decrease the credit utilization and eventually increase salary in hand. Once you get the home loan you can switch on to your tax friendly CTC.

[4] Salary of spouse- This is an important point which borrower ignores. He may not be aware of the fact that the loan providers give incentives to women in order to promote home loans. they give 0.05 % less interest rate to women and even reduction in processing fees if the loan is applied in the name of a woman. There is not even a single case where woman is the only borrower; she shares it with her husband. The loan provider is hesitant to provide loans to female as they doubt that woman may leave her job due to family issues and commitments. Banks like ICICI Bank do not handle home loans if there is no female co owner. For best results one should consider CIBIL score of both the partners. Hence one should not only work on improving his CIBIL score rather he has to work on the score card of his wife as well to uplift home loan eligibility amount.

[5] Do not change job-while planning to opt for a home loan one should not change jobs frequently. One should have worked in the same organization for complete 2 years. Change of job adversely affects the home loan eligibility amount. Hence plan two years in advance if you are aiming at higher home loan eligibility amount.

[6] Decide loan provider well in advance- most of the banks prefer providing loans to their existing customers only. If you are looking for a home loan in next year then you should start with bank account right now. You have to do simple things like, start with opening a saving account and put your excess money in the account. Bank keeps a regular check on the account of the holder and if the relations are good then it will increase home loan eligibility amount as per your goodwill.

[7] Regularly pay off your monthly bills- a loan seeker should follow sound credit practices prior to 2 years of loan. Make sure you pay all your bills on time and you should not have any outstanding bill credited to your account. This plays an important factor while fixing the loan amount. You should not take any loan or overdraft at least 4 years before seeking loan for home. This sound credit facility will enhance your CIBIL score thus increasing the eligible amount of home loan.

[8] Insurance- some banks take insurance policy of the borrower into consideration. An insured person is at least risk and bank is wishful to give more loans to such peoples. This also tells the bank that the borrower is an informed person who is good at financial planning. Health insurance of 8-10 lakh and term insurance ten times more than annual income are two prerequisites for availing home loan.

These are few factors which clearly qualifies you into a stronger position of availing more home loan eligibility amount.