How to Increase Your Home Loan Amount

Increase Existing Home Loan Amount

Home Loan applications are approved based on certain parameters, such as credit score, age, income, existing liabilities, and employment, among others. These factors help determine the loan amount that can be sanctioned to you.

In some cases, you may secure approval for a lower principal amount than expected. However, you can try and enhance your profiles in terms of credit, income, and financial parameters, among others. It is advisable to work on your profile before reapplying to enhance your chances of a better Home Loan offer.

Ways to Increase Your Home Loan Amount

When you seek a bigger loan amount, here are a few things that should be kept in mind:

1. Maintain a Good CIBIL/Credit Score

Upon receiving a Home Loan application, your credit score is first assessed to understand your creditworthiness. Generally, a good score of 750 helps in availing of higher loan amounts along with competitive interest rates. However, timely loan repayments should always be ensured to maintain a good credit score. If you pay your credit card dues and monthly instalments on time, it reflects positively on your credit records. On the other hand, repayment delays or defaults can affect your credit score negatively. A low credit utilisation ratio also benefits your credit profile.

2. Consider Joint Home Loans

Co-borrowing is an effective way to increase your Home Loan amount. When you apply for a housing loan with a financial co-applicant, who has regular sources of income and an ideal credit score, it helps in availing of a preferential loan principal, and maximises tax benefits.

3. Clear Other Credit Liabilities

Existing obligations occupy a share of your repayment capacity and, thus, can impact your loan application adversely. For instance, if you have a personal loan, you will need to bear its EMIs, which will allow for lesser room to pay your Home Loan EMI. Thus, to maximise your chances of availing a sizeable Home Loan, it is prudent to clear existing obligations before applying.

4. Include Additional Income Sources

Ensure you include all your earnings, such as rental income and investment dividends, to try and showcase a higher eligibility.