Not everyone is lucky to buy a house before retirement. There are people who plan to buy a house post-retirement, with the use of gratuity and lifetime savings. Unfortunately, this may not be enough, but many people don’t want to give up on the dream of owning a house. Many people look to avail home loans in the 60’s.
Availing home loans in 60s is not as easy as you think. There are not many lenders sanctioning home loans to senior citizens, as they don’t have a regular source of income and life expectancy is short. You might still be working, but the number of active working years is much lesser and hence lenders consider you, risky.
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Lenders fix home loan tenure for senior citizens, such that repayment ends by the time they attain the age of 75. The maximum tenure you get when you apply at 60 is 15 years. Hence, for longer tenures, you must apply at the earliest. Try to make maximum down-payment as lenders don’t offer loans of high quantum to senior citizens.
SEE ALSO: What Is Home Loan?
It’s always good to check eligibility before applying for home loans. You being a pensioner, the chances of your home loan application getting rejected are high. Generally, lenders sanction home loan amounts such that only 40% of your monthly pension goes towards home loan EMIs. Lenders don’t compromise on this for any reason. You can check your eligibility with the help of eligibility calculator on the lender’s official website. Take a look at IndianMoney.com Home Loan Calculator.
As mentioned earlier, lenders hesitate to offer high quantum loans to senior citizens. LTV is defined as the ratio which depicts the amount of loan offered against the market value of the asset proposed for the purchase (In this case the house). As per the RBI guidelines, lenders are authorized to offer LTV of up to 75-90%. This depends on the credit profile of the applicant and market value of the asset being proposed for the purchase.
If you don’t meet the eligibility criteria, then you must consider applying with a co-applicant. Co-applicant must be someone with a regular source of income. It can be your spouse (pensioner or salaried), children or any other blood relative. Applying with co-applicant enhances your income and you stand a good chance of getting the home loan sanctioned.
If you have a bad credit track record (poor repayment history), then you must try to improve it before applying for a home loan. There are banks and NBFCs issuing credit cards to pensioners and you can avail these to enhance credit score. If you have a good credit score, then your chances of getting home loans sanctioned are high, if not, then it’s much lower.
You must compare various lenders before making a choice. Check for the benefits and schemes offered by different lenders on home loan. Check for the interest rate, LTV, tenure, flexibility in repayments and so on. Choose that lender who is offering loans as per your requirement.
If you are a senior citizen with outstanding loans (personal loans, vehicle loans and so on), then chances of your home loan application being rejected are high. To avoid this, you must first clear outstanding loans and then apply for a home loan. This is because the lenders feel you won’t have enough money to pay home loan EMIs in time.
SEE ALSO: Home Loan Interest Rates Rising
To stand a better chance of availing home loan, it’s advisable to apply at the earliest, as home loan lenders (banks/NBFCs) consider lending to senior citizens, risky. If you are a senior citizen with the unfulfilled dream of owning a house, then you must follow the above mentioned steps to improve your chances of getting your home loan sanctioned.
You must opt for that lender who compromises on loan terms and is offering customized loan packages. You must explore various lenders and choose the most suitable one. Work closely with the lender to fix the loan quantum and tenure.
Due to stiff competition, many lenders have relaxed loan regulations. It’s become easier for senior citizens to avail home loans.
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