Without a doubt, buying a house or a home for that matter is one of the most important decisions that an individual can make in life. While many people dream of owning their dream and perfect homes, it can be quite a challenging task, especially when considering all the hurdles that are involved in arranging the finances required in making such expensive purchases. With this in mind, many financial institutions use home loan eligibility calculator to determine whether an individual is qualified to access home loan. Various factors such as income, employment status and tenure, among others are used by the financial institutions to determine whether you are qualified to get a home loan. Here are some of the factors that are likely to be considered in your home loan eligibility calculator.
Have a Thorough Check at Your Credit History
As a borrower, planning ahead and knowing all the eligibility issues required of you is not only helpful, but also essential in ensuring that your home loan bids are not turned down. Always keep in mind that lenders will definitely have a thorough check on your credit history through various credit bureaus. The information received from credit bureaus will enable lenders to make a more informed decision on your loan pre-qualification. Through credit bureaus, the lender will be able to obtain your (borrower) credit score and report regarding bills payment history and any other outstanding debt in comparison to your income. Having a high credit score will make it much easier for you to obtain or to pre-qualify for a home loan. Therefore, it is vital to get a copy of your credit report from various institutions such as Equifax, Experian or TransUnion for free. This will enable you to see whether you have any outstanding debt or determine any error regarding the same.
Total Monthly Housing Costs Measured Up to Total Monthly Income
Most lenders will compare your total monthly housing costs to your total monthly income in your home loan eligibility calculator. This guide will involve you as the borrower writing down the total gross amount received every month before any deductions. This will then be multiplied by 28 and depending on percentage; you will pre-qualify for a home loan if your monthly income is much higher than your monthly housing costs.
To a greater extent, your employment status will be a crucial consideration in your home loans eligibility calculator. For instance, salaried individuals, especially in permanent service in the government are likely to access higher home loans than self-employed individuals. Again, professionals such as doctors, engineers, lawyers and accountants among others are more likely to receive higher mortgage loans than their non-professional counterparts. This is not to say that non-professionals cannot access home loans, but rather to show that the rates that they are likely to get may not be as high as those given to the professionals.
With the above factors, as well as others such as tenure of employment in mind, you should always be aware that home loan eligibility calculator is a tool that assists both the lender and the borrower to arrive at results that are illustrative of the amount that you can get depending on the factors that are required by the lender.