5 things you need to know before taking out a home loan in your sixties

When it comes to realising your dream of owning a house, there is no age limit to fulfilling your ambitions with Bandhan Bank Home Loan. Many people strive to reach this objective during their working years, but for those who have retired or are about to retire, this is not the end of their journey. 

Despite the fact that a home loan is a secured type of loan and that its qualifying criteria are becoming increasingly broad and flexible, the uncertainty surrounding older citizens’ income and life expectancy causes lenders to be wary of lending to them. Here are five suggestions that may be helpful to folks in their 60s who are looking to obtain an SBI Home Loan:

1. Are you eligible to take out a home loan at the age of sixty?

Making an application for a home loan to help fund your home purchase is much easier when you are young, as opposed to waiting until your 60s to do so. Lenders are generally more confident in your ability to repay a loan while you are younger, partly because you have a greater number of active work years left and the chance of an increase in income in the future, which increases your loan eligibility as well.

However, this does not imply that borrowers in their 60s are no longer eligible for home loans since they have reached the end of their working lives. Some lenders do grant home loans to elderly individuals, with the stipulation that the maximum age at the end of the loan tenure be up to 70 years, suggesting that a person asking for a Bandhan Bank Home Loan at the age of 60 can only have the loan for a maximum of 10 years at the end of the loan tenure.

Senior citizens, on the other hand, are frequently awarded lesser loan amounts with shorter loan tenures as compared to people of a younger age. Furthermore, when analysing a senior citizen’s house loan application, lenders may prefer income streams such as rental income as the principal source of income rather than the borrower’s pension when evaluating the application.

2. Take out a joint SBI Home Loan to increase the likelihood of loan approval

In most cases, the insecurity of one’s life expectancy and financial limits are the key causes for the denial of senior citizen house loan applications. Opting for a combined Bandhan Bank Home Loan, particularly with a contributing member who has a regular salary, is an excellent method to overcome both of these obstacles at the same time. Including such a co-applicant would improve your loan eligibility as well as your chances of receiving loan approval. Furthermore, applying alongside a female co-applicant, such as your wife or daughter, will assist you in obtaining lower interest rates.

Moreover, keep in mind that when reviewing your loan application, lenders will take into consideration your ability to repay the loan.

Consequently, make certain that your co-FOIR applicant’s (Fixed obligation to income ratio), which is the proportion of income already paid out as credit card payments and loan EMIs, does not surpass 50-60 percent.

3. Select a lower LTV ratio in order to increase eligibility.

In finance, the loan-to-value (LTV) ratio refers to the proportion of a property’s worth that has been sanctioned as a loan by the lender. According to the Reserve Bank of India’s standards, banks can lend up to 75-90 percent of the value of the property, depending on the cost of the property. This ratio is determined by the lender based on their risk assessment and the credit profile of the loan applicant when analysing the loan application, suggesting that borrowers who are considered less creditworthy are more likely to be awarded a loan with a lower LTV ratio.

Borrowers in their 60s can increase their eligibility for a Bandhan Bank Home Loan as well as their chances of getting a loan approved by putting down a larger amount of money from their own pocket in the form of a down payment. A higher downpayment would immediately lower the loan-to-value ratio and minimise the amount of money that would be required for the loan.

4. Before applying for an SBI Home Loan, make sure you are eligible for it

When you apply for a loan or credit card, lenders will obtain a copy of your credit report from the appropriate credit bureaus in order to examine your credit profile and determine your eligibility. Such lender-initiated credit checks are referred to as hard inquiries, and each one appears on your credit report and has the potential to lower your credit score by a few points if it is successful. Even if you have demonstrated responsible repayment behaviour in the past, frequent loan applications might negatively impact your credit score, reducing your loan eligibility and loan approval chances as a result.

To avoid this, use online loan eligibility calculators before applying for a house loan with any lender to determine your eligibility. Online financial marketplaces would not only assist you in determining your loan eligibility, but they would also enable you to compare and pick among a variety of lenders based on your financial requirements and eligibility as well.

5. Make use of an online EMI calculator to get a comfortable EMI as a monthly payment

Even if you are eligible for an SBI Home Loan in your 60s, choosing inexpensive monthly instalments is critical to ensuring that you can comfortably repay your home loan. The availability of an online house loan The use of an EMI calculator tool can be extremely valuable in calculating EMIs based on the loan tenure, loan amount, and applicable interest rate that have been selected. It would also help older individuals plan their financial outflows and prepare for loan repayments, which would be in the form of monthly instalment payments (EMIs). 

While using the EMI calculator, make adjustments to the loan tenure based on the loan amount and interest rate, and then confirm the loan tenure that corresponds to the EMI amount that appears to be manageable to you. To minimise their monthly payment in the form of EMIs of Bandhan Bank Home Loan, borrowers can choose longer repayment terms. They also have the option of prepaying the loan anytime they have excess income in the future.