Top 5 Tips to Consider Before Taking a Home Loan in Your 60's

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17 MAY, 2021

Time flies quickly; and before we know it, we are in our 60s. So, it’s quite possible that you may have spent most of the working life meeting your family’s needs, raising kids, meeting financial responsibilities, travelling, etc. And under the weight of all these responsibilities, your lifelong dream of owning a house might’ve taken a back seat. But don’t worry, it’s not the end of the road, and you can still realize your goal of owning a house. Home loans for senior citizens have made it possible for aged individuals to buy a house comfortably.

Though availing a home loan in an old age can be difficult, the good news is that various lenders have come up with flexible eligibility criteria and special schemes for senior citizens. Therefore, a home loan can be of great help to finance your home purchase.

However, before you apply for a home loan in your 60s, ensure to make a note of the below-mentioned factors:

Check Your Home Loan Eligibility

When you are younger, you have many years of employment ahead of you. Therefore, lenders are more confident about your repayment capacity and grant a higher loan amount. While availing a loan in 60s, the loan eligibility decreases due to income constraints and uncertainty of life span. Thus, it is important to check your loan eligibility with the help of an online home loan eligibility calculator beforehand. This will reduce the chances of rejection. For example, credit score is one of the important eligibility criterion for home loan. Usually lenders prefer the borrower to have a credit score of at least 700 to approve their home loan application. Therefore, to ensure that the loan application is not rejected, you should first check your credit report and ensure that you have a good credit score before applying.

Consider Availing a Joint Home Loan

You can consider applying for a joint home loan with an earning member of the family like your spouse, daughter or son having a stable source of income. This will enhance your home loan eligibility as the lender may also consider the repayment capacity of the co-applicant before approving the home loan.

Opt for a Lower Loan-To-Value (LTV) Ratio

If you are retired and meeting your monetary requirements with the pension, then it’s advisable to opt for a lower Loan-To-Value (LTV) ratio. LTV ratio compares the loan amount granted by the lender against the property’s total value. The lower the loan amount you apply for, the better will be your loan eligibility. Try to make a higher down payment while buying a house, as this will not only reduce your debt burden but also help save on the interest pay-out.

Calculate and choose an Affordable EMI-calculate

If you would be paying the monthly instalments with the pension you receive, make sure that you calculate your expenses and choose an affordable EMI to ensure comfortable repayment. By choosing an EMI that suits your budget, you won’t have to compromise much on your lifestyle. The EMI for home loan for pensioners can be calculated using an online EMI calculator.

Read the Fine Print Carefully

Read and understand the terms and conditions of your home loan agreement carefully. Make a note of all the charges such as the interest rate, processing fee, prepayment penalty, etc. There could be some additional charges for taking a home loan in your 60s, considering the risk factor for the lender is high. Ensure that you enquire about all such additional charges from your lender before applying for the loan. In case of a joint home loan, ask your co-applicant also to thoroughly evaluate all the clauses set by the lender.

With Kotak Mahindra Bank, you can easily avail a home loan for senior citizens up to an age of 65 years at an attractive interest rate. It’s never too late to realize a dream, especially when it’s of buying your own house. Apply for a home loan, and fulfil your lifelong dream today.

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