Home Loan Tips: Home loan is not easily available after retirement. Banks are also generally hesitant in giving loans to a retired person. However, if you apply for a loan with a little understanding and preparation, you can get success. Senior citizens have to fulfill a few more conditions to avail a home loan. Today we are telling you some important tips that will help you in getting a home loan.
Before applying for a home loan, senior citizens should take an eligibility check on the basis of their age, income and other aspects. Keep in mind that eligibility varies from bank to bank. Experts believe that the applicant should be a pensioner in whose case a stable pension income is expected during the tenure of the loan. Applicant’s age should not be more than 70 years from the date of application. The loan repayment should be completed before the applicant’s age is 75 years. Think of it like that an applicant who has attained the pension of 70 years can only get a home loan of 5 years.
Adding a co-applicant with you is a better option while applying for home lane after retirement. By doing this the risk of the lending institution is reduced. The co-applicant should be a person who has a stable income and a good credit score. While applying for home loan after retirement, the loan is available but its amount is less. The loan amount increases only when no co-applicant with good earning is joined together. Adding a co-applicant greatly increases the chances of getting a loan. It can be availed at reasonable rates for a longer period.
borrow at least
Keep a low loan-to-value (LTV) ratio for home loans and keep your contribution high for buying a home. This increases the buyer’s contribution to the property and reduces the EMI. The higher the buyer’s contribution, the lower the risk of the bank. At the same time, low EMI increases the loan affordability. Both these factors increase the loan eligibility of the buyer.
Secured loan will help you
A loan taken against the guarantee of an asset is called a secured loan. The risk of banks is less in case of secured loans. The rules for secured loans are a bit softer than for unsecured loans. Loans can be taken against assets like property, gold, shares, mutual funds or PPF etc.
Good credit score is also important for retired people. Most banks and financial institutions consider a score of 750 and above as good.
turn to public sector bank
After retirement, if your income is your pension, then you can apply for a loan in a government bank. Government banks offer pensioner loans for which it can be easy to meet the eligibility criteria. The interest rates are slightly lower in these as compared to personal loans.
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