Housing loans, by their very nature, are high-value credit options and involve a long repayment tenor to assure repayment. Resultantly, it is advisable to apply for credits like this as early as possible in life to complete the repayments without hassle.
However, that does not mean one cannot avail a home loan after their retirement or post 60 years of age. It can be difficult, but it is certainly not impossible, especially if said applicant is self-employed. Financial institutions usually set their upper age limit for home loan eligibility at –
- 62 years for salaried individuals
- 70 years for self-employed individuals
Interested individuals can still complete the required process and access the credits to fund their property purchase.
Nonetheless, to complete this process successfully, one needs to be aware of some pointers that can ease his/her way into it.
Top things to consider while applying for a home loan after 60
Here are some pointers that prospective borrowers can follow to successfully qualify for home loan offers post 60 years of age –
- Keeping the credit profile in check
Whether an applicant is a senior citizen or not, lenders always emphasise a healthy credit profile to approve credits. Maintaining a credit history without any default and a CIBIL score over 750 suggests that a particular borrower is a responsible one. Therefore, such individuals can easily qualify for these credits.
Similarly, individuals above the age of 60 can also work and maintain their credit profile to easily apply for a home loan and not face rejection. In this regard, they can undertake different steps such as manage their credit cards, make timely payments of other loans, etc.
- Opt for a lower LTV
LTV or loan-to-value ratio represents the percentage of the total property value that one can finance through a lender. For instance, if a property has a market value of Rs.1 crore, and a lender proposes an LTV of 80% against it, then individuals can avail up to Rs.80 lakh as a home loan for that particular property.
A point to understand about LTV is that a higher ratio always carries a bigger risk for financial institutions. Therefore, financial experts suggest that in case an individual above the age of 60 years is planning a home loan, it is ideal to keep this ratio low, preferably below 65%.
This means potential home buyers need to make a higher down payment to avail a loan easily. Individuals can use an EMI calculator to make an informed decision.
- Selecting a shorter tenor can help
Besides down payment, the loan tenor also has a sizeable role to play in deciding the home loan rates and EMIs. Therefore, when borrowers opt for a higher tenor, presumably 20 years, they may have a reduced instalment, but a financial institution may not be willing to extend a loan for that period.
On the other hand, opting for a lower housing loan tenor may increase the EMIs, but will lower the total outstanding amount. Simultaneously, the risk for financiers will also lower, which will increase the chances of securing a home loan without fail. At the same time, one should also know ways to reduce home loan tenor and EMIs for better results.
- Get a co-applicant
Having a co-applicant always improves the chances of securing any loan, and if it is a high-value one like a home loan, it is even better. With a co-applicant on board, the repayment liability will be shared among both, and even if one of them falters, the other one can manage. Also, in a joint loan application, financial institutions consider the eligibly of both applicants.
Therefore, if an individual above 60 puts his/her children as a co-applicant, and if that individual is earning and has a good credit history, it will be easier to get approval. Additionally, the involved parties should also know the tax benefits on a joint home loan to leverage its benefits.
One can also add incomes from every source, such as interest income, rental income, etc., to improve his/her chances of approval.
Apart from these, applicants can also compare important home loan fees and charges before proceeding with the application. It will help them to save on additional costs.
Leading financial institutions, however, levy minimal extra charges that can keep the cost of credit low. They also extend pre-approved offers towards their existing customers that can allow them to skip the hassle of a loan application. These offers are available on various financial products, including home loans, loans against property, etc. Customers can check their pre-approved offers online by providing their name and contact number.
Securing a home loan includes careful planning and arranging finances accordingly. So, even if someone is above the age of 60 years, he/she can still avail the funds with adequate preparation.