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How to get a Home loan with Low Income?

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Home loan with Low Income

If an individual belongs to low-income group, then he can apply for home loan by making a joint application, borrowing less loan amount, reducing the existing liabilities or depositing large sum of money as downpayment. Many banks have also arranged home loan schemes to the low-income groups.

Some people feel that they are not eligible for obtaining home loan. They are unemployed or are receiving pension or government benefits. Persons with bad credit score cannot apply for home loans as their substantial amount of income is spent in paying EMIs and credit cards.

It is true that lenders evaluate the home loan applications on the basis of income of an applicant. Your income must cover your loan repayments in the form of EMIs. Apart from these, your income is spent for home repairs, taxes and home insurance, if any. Planning your income is essential before applying for home loan. If you are not getting the benefit of specialized home loans for low-income groups, you can work on your weak areas and then apply.

The steps for strengthening your eligibility for getting home loan with low income can be listed as follows:

Joint application

If your spouse is earning well, then you can make a joint application for home loan. The bank will understand that you will divide your future loan repayments between you and your spouse. The property will also be owned jointly by you and your spouse. The financial background of both borrowers is considered by the bank. You may also purchase property by making joint application with a partner or friend or co-signer. You must always enter into a proper legal agreement. This will help at the time when the property is divided between the parties.

No more loans and loans

You must keep a track of your debts and liabilities. The lending bank analyzes your past financial transactions along with your income records. If large portion of your income is spent towards payment of debts, then lending bank will never accept your application. You must get your credit score, work on your loopholes and then make a fresh application for home loan.

Reduce the size of home loan

If you are applying for home loan, apply it for a small amount. If you have applied for substantial amount, then the bank will not take a risk. The bank is of the opinion that you won’t be able to repay out of your low income.

Increase the downpayment amount

If you have low income, then try to deposit large amount in the bank as downpayment. The lender will feel that you are able to plan your finances efficiently. Moreover, you will ask for less loan amount according to your income level. You may arrange your downpayment amount from your savings, borrowing from friends or from private lenders. But you must record all your future repayments properly.

Thus, even if you have low income, don’t lose hope. Having low income and bad credit are two different situations. You can also discuss with your lending bank about your financial plans with regard to loan repayments.

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10 COMMENTS

  1. The ever increasing property rates in the urban areas has,opened up a new market for loans. Banks, private institutions, home financing ventures are coming up with variety of schemes to fulfill the demands of people from all stratas of society. Also, the trend of both the partners working makes it more feasible to apply for loans easily leading to higher approval chances

  2. Gone are the days when owning a home was for dream for lower income group. Nowadays, there are many way by which low earning people can get home loan approval. The provisions of joint loan and co-signing are boon. Another person can help you qualify for the loan. You can take joint loan with spouse, mother, father, brother or friends. In joint loan, other person will also have equal right on the property. In case of co-signing loan, the co-signer is only responsible for repayment of loan; he/she will not have right on the property.

  3. Dreaming of having your own home is no more a dream nowadays. New loan system/ policies/ schemes have made low income earning people to rethink about having there own home. I like the joint application or join loan system. It would have surely helped many couples to go for there own dream home. The idea mentioned in the article for how to track everything after taking loan was good, it would surely help the newbies who want to take home loan.

  4. To have a home of your own is the dream of all. However, sometimes it is not possible because an individual has low income. Today even if you do not have a very high income, there is no reason to lose heart because following certain steps you can easily become eligible for home loan. Instead of deciding yourself that you are not eligible for a home loan, talk to your bank and they might have different version.

  5. The idea of applying a joint home loan sounds appealing. True, a lot of people have regular income but house is one thing everyone desires and wants to own. What one can do is, if they cant afford a lavish house, they can take a loan and pick up a regular small apartment. The value of the apartment will for sure go up as is the set rule when one is investing in property. And once they can save more money, and their income has also increased, they can sell the existing property and buy a dream house. So don’t get disheartened because there are a lot of options out there for everyone.

  6. LOW INCOME can never be a hurdle in your home loan -this article proves this well.
    This ignites a hope in a low-income person ,who feels hesitant to take home loan for his dream house.
    Gone are those days ,when had to wait for a high paying job to have his own dream house . As now ,the times have changed and are turning for the help of man. The article is an evident of the same and is worth reading.

  7. Building home is a basic necessary and most of their dreams which will come true those who have money and what about others those who are not having enough money? Yes here it comes to our mind i.e. HOME LOAN. In order to get loan there is conditions and this article has given such a proper knowledge. It’s neat and clear !

  8. This is so nice to know. A home is what everyone needs – but it just isn’t affordable for a lot of people. Where I’m from, people only dream of owning a home – but if they read this article I’m sure they’d feel they have so many more options. Even if they have existing debts for their car or something.
    It’s so great to be told not to lose hope in something that every person dreams of.

  9. Nowadays it become a luxury to afford a decent house. Even though you have a job that provides you a proper amount of money each month, it is really hard to get enough money to buy a flat or a house. I got disheartened by some acquaintances as regards a loan, but I am currently reevaluating my options and for sure I will try to contact a bank who can provide me a loan. Can anyone suggest me how ca I negotiate my terms and conditions at the bank? Thank you in advance!

  10. Owning a home is no longer a dream. To own a house increases one’s value in the society. But then to own it when the earning is not enough is a real challenge. But with the options like joint application where both the life partners or friend or family member is a joint owner is even a good option.

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