Planning for home loan; keep these points in your mind

Most of us dream to own a property, but lack of requisite amount leaves us with no choice but to go for a bank loan.
 
Getting a home loan from bank is stated to be easy now, but it involves criteria like showing your monthly income, your capability to repay debt and your current assets to avail the facility.
 
If you fulfil the bank's criteria, your home loan process moves towards the next step. The real difficulty arises when you fall short of certain eligibility.
 
According to Bankbazaar report, there are five important tricks which can support your eligibility for a home loan.
 
Income and Tenure
 
Usually loans and interest charged on them are termed as earnings for banks, therefore it becomes very important for lenders to check your capability to repay that debt.
 
Banks look at your monthly income to assess whether you can accommodate your EMIs along with your other expenses.
 
In case, your net income meets all the obligation but is lower than expected EMI for a home loan, then banks refrain from lending you money. EMI obligation can be taken care, if you increase the tenure of the loan.
 
No existing debt position
 
Before opting for a home loan, always remember that you have closed all your previous debts. This improves your eligibility to qualify for higher loan amount and is always better to show the lender that you are capable to avail the service.
 
One way to close your previous debt is to increase the EMI amount and close the loan early if your income increases in the future. There is no penalty for loan pre-closure.
 
Apply for loan along with a co-borrower
 
Having co-borrower provides potential in saving you from loan rejection. Your combined income along with your co-borrower can meet the income gap required by a bank to give you a loan.
 
This co-borrower can be anyone your parents, relatives, spouse or friends among others.
 
Bank will look at the combined capacity of both the applicants to assess the loan eligibility.
 
Consider step up loan
 
This is specially designed for the borrowers who expect their income to increase in the near future but currently not able to service a high EMI amount.
 
Under this category, banks allow you to pay lower EMI in the initial few years.
 
EMI increases over the years considering that income of the borrower would increase in such period without any change in tenure.
 
Add additional source of income
 
If you still fall short of income, EMI eligibility, then you can give other source of income like rental income or interest income from deposits, or show bonus from employer to prove your income eligibility.
 
You can also add income from freelance work to increase the income level.
 
Before applying for a home loan, you must be careful enough to see the nature of its interest rates charged by banks. There are two types of interest rates named as fixed interest rates and floating interest rates.
 
There is one advantage for the first-time home buyers as they are eligible to get the subsidy benefit under the government's PMAY scheme.
 
Pradhan Mantri Awas Yojana (PMAY) gives you subsidy of around Rs 2.3 lakh which gets credited upfront to your loan account and raises the possibility to your eligibility to that extent.
 
Other important points that need to be remembered for home loan are keeping your CIBIL score at a higher level, stay ready with the down payment money and select the property which fits into your financial capacity.