Points To Remember When Applying For Home Loan In 40s

Indian banks consider various factors before granting a home loan to an individual. These factors include credit score, his profession and nature of work, number of dependents, medical history, assets and liabilities, lifestyle habits, etc. One of the primary factors that play an important role in determining the EMI (equated monthly installments) and tenure of the loan is age of the borrower.
As the home loan repayment period is usually around 20 years, lenders pay special attention to the borrower’s age before sanctioning a loan. So, what if one is applying for home loan in 40s? Does it impact your eligibility and possibilities of availing of a home loan?

While no bank or financial institution can reject your loan on the basis of your age, there are certain points that can improve your odds of securing a home loan swiftly.

Pay more as down-payment

As individuals in 40s are generally at peak of their careers in this age bracket, they are expected to have significant savings under their belt. That saving amount can be utilized to pay substantial down payment. This will decrease the amount of loan and consequently the EMI amount.

Go for the shorter tenure

Banks generally provide home loan for 20 years. Let’s say, you are 48 years of age and apply for a 20 years loan, the lender may think several times before sanctioning the loan. But, if you apply for 10-12 year tenure, things will go smoother.

Explore the prepayment option

It is always better to repay the loan amount before the retirement age approaches. And, you should check with banks if they provide prepayment option. However, it is not equally accepted by all the banks. Some might put high penalty charges and some might charge minimal penalty.

Look for the one that allows you to prepay the lump-sum when possible. Nowadays most lenders do not levy any penalty on prepayment but there are certain conditions attached to it. They, for instance, may not consider prepayment until the amount is at least equal to three-four EMIs or so.

Consider joint home loan

Due to the age constraint, an individual in 40s might not get the tenure and loan amount of his choice. However, if he applies for a loan with a co-borrower who is financially stable, there are possibilities of getting higher loan amount, lower EMI’s and a longer tenure.