Smart Socho: 7 DIY tips that can get you a bigger home loan

A majority of mid-income home buyers prefer to take the home loan to fund their dreams of buying a home. Banks have rigorous eligibility criteria, when it comes to disbursing home loans and potential clients often have a tough time calculating their eligibility given the complexity of the many parameters involved.

In a nutshell, it's a process wherein the lender considers three main factors, namely your existing liabilities, current assets and income from all sources. Often the amount you are eligible for falls short of expectations in terms of financing the property transaction, which could lead to further financial complications for the home loan customer.

However there are tried and tested ways by which one can enhance their eligibility and avail of a higher amount to fulfill their dream of owning a home.

Listed below are the Top Seven tips a home loan customer can avail of to improve his/her eligibility for a home loan:

Ensure zero liability: This is an important factor and one of the first things a lender looks into when deciding the eligibility of the customer. So ensuring that all your liabilities viz. credit loans, personal loans etc are paid in full, prior to applying for a home loan.

Remember to close the account once the loan is repaid and collect a zero-liability certificate whilst ensuring that it's reflected in your CIBIL credit score.

Income Variables: Most employees have a fixed and variable component as part of their CTC. While the fixed is paid every month by way of cheque or a direct credit into the employee's bank account, variable pay or perks are a little more difficult to a track of.

Keeping a record of exactly how much you make in terms of your variable pay component is an important factor to enhance your credit eligibility for a home loan. Lenders take it into account while calculating the final amount that you could avail by way of a loan.

Income from Rent: Many customers often have property sitting idle. In many cases it's a vacant home back in their hometown. Make it a point to lease it out before applying for a home loan. Rental income earned forms part of your financial appraisal and can play an important in improving your credit rating.

Opt for a longer tenure: Normally it's always better to repay a loan in the fastest possible time, home loan or otherwise. However if you are looking for a way to enhance your eligibility further opting for a longer tenure can impact your loan amount favourably. The max tenure allowed currently is 25 years.

Is your Spouse employed? If the answer is yes, taking a joint-loan is always a good idea to increase your eligibility exponentially. The reason being, both incomes are taken into consideration to decide the final amount, further it's also a recommended way to reduce individual liability by sharing it equally between two individuals.

Haste is Waste: Many home loan seekers in their zeal to get a loan quickly make the mistake of applying to multiple lenders. Applying with 10 different lenders is no guarantee of getting a loan from any one of them. Instead focus on short-listing those lenders whose terms suit you the best.

A good CIBIL score often ensures a line of lenders ready to offer you a home loan on customized terms. Choose a lender who is ready to offer you a loan at competitive rates with easy repayment schedule backed by efficient customer service network.

Step Up loan option: A viable option especially for self-employed professionals like doctors or CA's whose initial incomes might be low only to grow higher as they establish themselves professionals. In such cases banks offer loans with a lower interest for a fixed period initially and gradually increase the EMI once the repayment process begins.

Remember a home loan far below your actual eligibility can make all the difference between you and your family living in a cramped 1BHK or that spacious 3BHK that you always wanted but could never afford.