Applying for a Home Loan in Your 40s? Here is What You should Remember
Jun 12, 2018 Home Loan
Banks and lending institutions consider various factors while processing an individual’s home loan such as credit score, income, profession, nature of work, assets and liabilities, number of dependents and age which is one of the prime factors. Age determines the tenure of the loan as well as the EMI (equated monthly instalments) that the borrower has to pay.
The period for home loan repayment is usually around 20 years; therefore the lenders pay special attention to the borrower’s age. What if someone is applying for home loan in his or her 40s? Does it impact his or her eligibility to get the loan? Well no bank can refuse or reject your loan in the basis of age;
There are certain factors which can sort out the hurdles of availing a hassle free home loan.
The period for home loan repayment is usually around 20 years; therefore the lenders pay special attention to the borrower’s age. What if someone is applying for home loan in his or her 40s? Does it impact his or her eligibility to get the loan? Well no bank can refuse or reject your loan in the basis of age;
There are certain factors which can sort out the hurdles of availing a hassle free home loan.
- Make more down payment: In 40s individuals are generally at the peak of their careers. They are expected to have a significant savings and that amount in savings could be used to pay a substantial down payment. This will decrease your loan amount and certainly your EMI amount while giving you a better chance of availing the loan.
- Consider a joint home loan: a borrower in his or her 40s might not the desire loan amount or tenure. But if the borrower applies for the home loan along with a co- borrower who has a stable income and is financially sound then he or she has better chances to get a higher loan amount, longer tenure and lower EMI.
- Choose a shorter duration: usually the tenure for home loan is around 20 to 25 years. So for instance if you are 45 and you apply for a home loan for 20 years the lenders might be sceptical in sanctioning the loan. But if you apply for duration of 10 to 12 years then things could be smoother.
- Prepayment option: you should check with the banks for prepayment option as it is better to repay the home loan before you reach the retirement age. Some banks put penalty charges and some charge a nominal penalty. Look for the one who allows you to prepay a lump-sum amount whenever possible. However, nowadays, lenders do not charge any penalty but they do have certain conditions that you should know about such they might not consider making prepayment until the amount is at least equal to some minimum amount of three to four EMIs.
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