Are you trying to get a home loan after retirement? Here’s how to increase your chances of approval
With various approvals, documents, and eligibility criteria, obtaining a home loan is a tedious process. Obtaining the same loan after retirement and for the elderly can seem impossible without a stable source of income and various other eligibility criteria restrictions.
With that said, there are ways to get a home loan after retirement. Banks just have additional requirements for sanctioning home loans to the elderly. For example, depending on your age, income, and other criteria, your application will be considered for a mortgage after retirement. Note that the eligibility criteria may vary from one lender to another, and also from one plan to another.
Here are a few points that will help you get approved for a loan:
– Try to take out a joint loan. As a retiree, if you opt for a joint mortgage loan with an active person, you will increase the chances that the loan will be approved.
– In addition, if you, as a retiree, apply for the same loan with your children or your spouse, you could also benefit from a longer period of employment as well as tax advantages. Having a longer tenure will also reduce your NDEs.
– Home loans after retirement are generally approved with a small loan amount. However, having a co-applicant, especially someone who has a stable income and a good credit rating, reduces the credit risk for the lender, hence the chances of approval increase with an increased loan amount.
– One of the major pitfalls for retiree applicants is that he / she must be a retiree with a stable retirement income expected throughout the life of the loan. This increases the chances of getting the loan approved.
– The age of the borrower must not be more than 70 years old when applying for a loan. Banks and lenders generally approve loans for applicants up to the age of 70 and the loan repayment period up to 75 years. So, if you take out a loan at the age of 70, you will only get a 5-year mortgage.
– Try to opt for a lower LTV (Loan to Value) ratio. If you go for a lower LTV, it increases your chances of getting loan approval and minimizes the EMI burden.
– In addition, taking out a secured loan, against assets such as other property or gold, or securities, increases the chances of getting a mortgage loan approved. Lenders can use the assets as collateral to make up the unpaid amount, in case the loan seeker is unable to repay the loan amount.