If You Are Above 50 and Need a Home Loan – You Should be Reading This!
Buying a home is a dream for every individual. But due to the spiralling real estate prices across all major Indian cities, it has become difficult to accomplish that dream. You need to avail a Home Loan to be able to purchase your dream home.
Home Loans are extended by all financial institutions in India at Current Home Loan interest Rates. Home Loans are secured loans in the sense that you need to mortgage the new home with the lender till you make the repayment towards the entire loan amount. Generally, Home Loans are meant for 15-20 years, and thus the eligibility criteria lay particular emphasis on your age and income level.
It is indeed possible that due to the high real estate prices in your area or due to your limited income, it took you some years to accumulate enough amount for the down payment. Now by the time you are ready for the down payment, you are now over 50 years old. Though this does not disqualify you from being eligible for a Home Loan, it certainly makes the task of establishing your Home Loan Eligibility a little tricky. You need to plan smartly to qualify for a Home Loan if you are more than 50 years old.
Points to Remember
- You Need a Co-Applicant: If you are above 50 years of age, lenders would have a stricter criterion for your Home Loan eligibility as they assume your retirement age to be 60 and with reduced repayment period, your eligibility for a Home Loan becomes doubtful. In such a situation it is advisable that you make a younger earning member of your family as a co-applicant. This will help significantly with increasing your loan eligibility, loan tenure, taxation benefits and lower monthly EMIs (Equated Monthly Instalments). The young member that you will be getting on board should be an income tax payer and an earning member for the last three years.
- Opt for a Shorter Duration: Another option that you have is to accept the shorter term. As you are above 50 years of age, the maximum repayment tenor that you are eligible is 10 years. So, you can plan your finances accordingly to make the complete repayment within that period. You can also look at some other neighbourhood or a smaller house which is more affordable and fits your repayment plans. Though it is not the ideal solution but having your own home in an inexpensive neighbourhood is a much more desirable situation than not having it at all.
- Close Existing Loans: In order to improve your eligibility, you should try and close all your running loans. You should also ensure that the credit utilisation ratio of your credit card is below 30%. This will improve your credit score significantly and create a good credit history for you. This would help you in impressing the lender with the fact that you are a responsible borrower and their money would be returned on time. This will also help you negotiate better terms and conditions on your loan as well as will help you get the Home Loan at lowest possible current interest rates.
- Pay More Margin Money: If your eligibility for a Home Loan is being affected due to your age, you have an option of paying more towards the margin money and reducing the amount required for the loan. This will significantly improve your prospects of eligibility for a Home Loan. You need to plan ahead for this and cut down on your other expenses to save more towards the margin money. Opting for a smaller amount is a practical option, and it is better than not having any loan at all to support the dream of your own home.
- Research: Before you accept any offer from any financial institution, you must make sure that you research around and try to find the best deal for you. There are certain lenders who have favourable policies towards Home Loans for mature aged people who are close to retirement. Their terms and conditions would be highly suitable for you. So, it won’t hurt looking around.
- Apply to NBFCs: NBFCs have more relaxed eligibility criteria as compared to banks and have various products for senior citizens also. So, if you consider applying with any NBFC for your Home Loan requirements, you have a better chance of success. Age should not be a barrier to your being able to realise your dreams. So do not be disheartened if your application is denied by any lender on these grounds, there are plenty of other options for you to realise your dreams.
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