If you have ever thought of buying a house, you might know that it’s quite difficult to do so with your savings, thanks to the current real estate prices. Even if you can collect enough funds, there are high chances that you would exhaust all your lifelong savings on a house property.
Thankfully, you have the option of availing a home loan. With a home loan, you can buy the house of your dreams without making a hole in your pocket. Also, you can repay the loan in easy instalments.
However, you must know that there is a limit to the loan amount that you can avail. Before you plan to apply for home loan, it would help if you know the maximum amount of loan you are eligible for.
Read on to know more.
How much loan can you get?
You can get a loan amount that is equal to 70-90% of the property value. The remaining amount has to be paid by you as a down payment. However, the maximum loan amount that you can avail depends on your eligibility too. The higher the eligibility, the higher is the loan amount.
Your eligibility is based on factors like your age, income, existing debt, credit score, educational qualification, etc. Among these, your income or salary forms a vital determinant of your eligibility. Typically, lenders lend five times your annual income as the loan amount. In other words, you can get a loan of up to 60 times your monthly salary. Your net salary (after deducting income tax, provident fund, TDS etc., from your gross salary) is considered for determining the maximum loan amount.
Tips to follow to get a high loan amount
Take a joint loan
You can get a high loan amount by enhancing your home loan eligibility. Taking a joint home loan can help. Having a co-applicant who has a high credit score and eligibility can enhance your loan amount and can also help you get competitive interest rates.
Enhance your credit score
You can defer availing a home loan and apply after you have a good credit score. A high credit score increases your creditworthiness and hence makes you eligible for a high loan amount.
Pay off your existing debts
If your debt to income ratio is high, lenders can reduce your loan amount. Ideally, your total EMI (including the home loan EMI) should not be more than 50% of your monthly in-hand income. Therefore, to get a high loan amount, consolidate or repay all existing debts to enhance your repayment capacity and eligibility.
The amount of loan that you can get depends a lot on your property value and eligibility. If your property is located in a prime location, you could get a high loan amount at competitive interest rates. Similarly, a high credit score and income can also help you get a high-value loan. Moreover, to get a high-value loan, you can opt for a longer tenure as it would reduce the risk for the lender.
