Home, sweet home, built out of your dreams. A place where you return after a hard day's work and relax, a place where you share precious moments with your family. A place that gives you a sense of belonging. We are here to help you realize your long cherished dream of owning your home through hassle free and customer friendly home loans.

How to enhance your home loan eligibility ?

• To fulfill your wish of acquiring your dream home is under a doubt?
• Is your bank is not offering sufficient home loan to purchase your dream home?
• You are about to put hold on acquiring your dream home just because you are short of money?

Wait… Before putting halt your home loan decision just explore various options to increase your home loan eligibility as this might help you in availing higher loan amount and getting hold of your dream house.

Various options to increase your home loan:

1) Stretch your loan tenure

Tenure is a time period in which you pay back your loan that you have availed from the bank via EMI i.e. equated monthly installment. The basic rule of EMI is larger the tenure lower will be the EMI and similarly shorter the tenure higher will be the EMI and if you will take the larger tenure then automatically your EMI will decline and your paying capacity increases. The reason being your principal amount is spread among the number of years and it lowers the amount of EMI but amount of interest paid is higher in larger tenure, as one of the major components while calculating interest is tenure.

2) Clubbing of incomes

Another way is by clubbing income of your father/spouse/mother/son. This would help in increasing the eligibility of home loan. Clubbing of income refers to adding income of your mother/father/son/spouse to your while getting your file assessed for your home loan eligibility this would help in getting more loan amount approval. Maximum you can club your income with four people i.e. your mother/father/spouse/son for a single home loan. With the help of an illustration you will better understand how clubbing of income works:

Suppose an individual's loan eligibility, based on his income, comes out to about Rs 2,500,000. But the individual wants a loan worth Rs 5,000,000. Assuming the individual's father too is earning half annual income to his son. In such a case, the individual can club his father's income along with his own income and then opt for a home loan. The eligibility in this case, will be calculated on the clubbed income of both Father & Son- thus increasing the individual's eligibility to the amount of the father's income. The eligibility will come out to be at Rs 3,750,000 from Rs 2,500,000 earlier. Now to increase eligibility upto Rs.5, 000,000 individual is running short of 12,50,000 more as his wife is also working he can club his wife's income to his father and his income and his loan eligibility would increase to Rs.5, 000,000 and thus he can fulfill his wish of acquiring his dream home.

3) Clear your outstanding debts

Debt refers to outstanding liabilities of yours with banks like personal loan or car loan running etc., would be a hurdle in approval of your higher home loan amount as banks normally recommends that existing loans with over 12 unpaid EMIs are taken into account computing the home loan eligibility of an individual. In such circumstances, individuals have the option of prepaying in part/full their existing loans. This will make certain that their eligibility for the home loan is unaffected. If an individual who is looking for a home loan might be running with car loan whose 20 EMIs are outstanding in this case scenario, he has two options with him i.e. Firstly, he can pay the whole amount and take no objection certificate and loan clearance letter from the bank which he is running loan with or he can pay 9 EMIs in advance and then apply for home loan. So, that his home loan eligibility should not be affected by car loan or any other loan.

4) Step-up loan

Another option to increase your home loan eligibility is step-up loan. A Step-up loan is a product specially meant for young achievers as it's linked to their expected growth in income. Where EMIs can be low in the beginning and gradually increase as the consumer's spending power goes up or income increases. The EMIs will be increased in stages. For eg: For a 15-year loan, the repayment schedule, divided into 3 trances would give a step up in the EMI at the end of the 3 rd and 7th year. The EMIs for the first seven years constitute a large part of interest and a nominal sum of the principal portion. For the balance 8 years, the EMIs are stepped up to recover the outstanding principal and interest for the remaining term of the loan. In view of the tax benefits on the interest paid on the housing loans, this product can be used to maximize the tax benefit as it defers the payment of principal.

5) Balloon Payment

Balloon Payment is an enhancement tool, which helps in increasing the loan eligibility of the customer without increasing the EMI by assigning securities like National Savings Certificate (NSC), LIC policies etc to HDFC. The present value of the maturity amount of assigned securities is combined with the loan amount to arrive at the enhanced loan eligibility. Under this facility, the EMI is calculated on the net loan amount (i.e. total loan less the present value of the maturity value of the securities).

6) Perks

Salaried individuals can increase their eligibility by showing their performance linked income or bonus earned so that it will increase their eligibility

The examples in this note should only be treated as illustrations. Individuals need to work out solutions best suited for their profile after speaking to their home loan consultant and only then consider acting on the options discussed.

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