Since senior citizens do not have a steady income source, being their careers have most likely ended – lenders are apprehensive about giving them a loan. Nonetheless, several lenders offer loans to senior citizens up to a certain maximum age for home loans.
Hence, retired home loan applicants must know how they can improve their chances of getting a home loan approved.
Step-by-step process to apply for a home loan
Senior citizens can easily apply for a home loan by following these 3 simple steps:
Step 1: Navigate to the ‘Home Loan’ webpage.
Step 2: Fill up the application form by entering relevant details like:
- Full name
- Contact number
- Date of birth
- PAN information
- Property location, etc.
Step 3: Submit the online home loan application form.
Eligibility criteria for pensioners home loan
Here are the current home loan eligibility criteria for senior citizens:
- Senior citizens must be under 75 years of age.
- Loan applicants have had to be employed in an educational, public or private firm or institution.
- Retirees must be withdrawing a pension of at least Rs.5,000 every month from their respective bank accounts.
- Applicants have to be withdrawing their pension from the same financial institution through which they are availing of a home loan.
- The loan quantum depends on the amount of pension a senior citizen receives.
- Pensioners should provide post-dated cheques to lenders for security reasons.
Most financial institutions have set 70 years old as the maximum age for home loans. However, customers must check their lender-specific parameters to avoid hassles.
Documents required for senior citizen home loan
Here are the necessary documents pensioners must submit to avail of a home loan:
- Identity and age proof
- PAN card
- Voter ID card
- Aadhaar card
- 3 passport-sized photos
- Proof of pension
- Pension certificate
- Bank account statements
- Pension returns
Home loan interest rates for pensioners
Different lenders offer different interest rates on home loans for senior citizens. However, interest rates can be lower or higher depending on how well borrowers fulfil the eligibility criteria.
Retired applicants with ongoing home loans from lenders that levy higher interest rates may choose to avail of a home loan balance transfer. By doing so, they can opt for a lender offering lower interest rates and thus, save on their monthly expenses.
Top 4 tips for senior citizens to get easy home loan approvals
Retired loan applicants can follow these 4 tips to avail seamless home loan approvals:
Add a co-applicant
Retirees should consider adding a co-applicant while availing of a home loan to increase their eligibility. Doing so not only improves their loan approval chances but also allows borrowers to avail of higher loan quantum.
Refrain from applying multiple times
Several home loan applications can potentially lower one’s credit score. Thus, it decreases the chances of loan approval and in turn, increases the chances of application rejection. Ergo, individuals must compare loan offers from various lenders before settling on one.
Improve credit score
Since credit score is a benchmark for creditworthiness, borrowers should maintain a credit score of above 750 to increase their loan eligibility and get lower interest rates.
Opt for a lower LTV ratio
A loan-to-value ratio determines how much loan quantum a lender must credit to a borrower, based on the pledged property’s valuation. Therefore, retirees should go for lower LTV ratios to boost their home loan approval chances.
In this regard, many lending institutions extend customized pre-approved offers on home loans, loans against property, etc. This streamlines the loan application procedure and saves time. Applicants may check their pre-approved offers by providing their relevant information.
Though availing of a home loan for senior citizens is no walk in the park, following the aforementioned tips aid in improving their loan approval chances. Before retirees apply for a home loan, they must ensure not exceeding the maximum age for home loans.