A home loan includes great deal of intricacies which are often include arcane terms and hence making it difficult for a commoner and even difficult for the first time borrowers. Most of the loan applicants do not take the matter seriously and hence are likely to suffer set backs in the later part of the loan tenure.
While sanctioning a loan, lenders are more concerned about the future aspects as they do not want a customer who would default on his loan. To keep things simple they want to make sure in the beginning itself whether the applicant would be able to manage his loan or not, if an applicant does not satisfy a certain criteria then the lenders reject the proposal straight away.
To avoid rejection an applicant must check his loan eligibility before he applies for a loan, which in turn is decided by a number of factors. Loan eligibility of a particular borrower is the maximum amount that he can borrow; it mainly depends on the income of the borrower.
A borrower must have an idea about his monthly expenses so that he can get an idea about the amount that he can pay as the monthly installment for his loan. An applicant must borrow an amount which he can repay easily and it also helps him to avoid the risk of rejection.
Credit score is also an important factor, lenders wants the applicant to have a high credit score as it gives the lender and idea that the person does not default much and can expect that he will not do so with him as well.
The nature of job can sometimes also play a deciding role, a person working with a reputed company is likely to face less difficulty in finding a lender as compared to a person working with a lesser known company. Also, if a person is a constant job hopper then it can also add to certain disadvantage for the applicant.
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