Home Loan for Pensioners: Tips to get a home loan after retirement

NEW DELHI: Procuring a

home loan

for working individuals seems to be a tedious process as it requires various approvals and one needs to go through certain eligibility criteria. And for senior citizens, those who've retired it just seems impossible because their income source is not steady and is restricted.

Moreover, there are ways through which a retiree can obtain a home loan. One is required to go through the tips mentioned below:

Take a joint loan: If a retiree applies for a home loan with a working individual then the chances of its approval increase. Also, if the pensioner applies for the loan with their children or spouse, they get an increase in the loan amount and gain tax benefits.

Check your credit score: A good credit score is one of the most important factors that are considered by banks for approving the home loan. If the credit score is good then one can easily get an approval on the home loan and the interest rates might be low. Besides, if the home loan application gets rejected then this would spoil the credit score and would cause rejections to the loan applications in the future.
Therefore, one must do research regarding loan details online across all banks and apply if it is suitable.

Choose a secured loan: A loan that is backed by an asset is called a secured loan. These assets are used as security against the loan amount. In case, the loan applicant is unable to repay the loan amount then the asset used as collateral is compromised to make up for the unpaid amount. Also, a secured loan is easier to obtain as compared to an unsecured loan.

Opt for lower LTV (Loan to Value) ratio: Loan to value ratio is the ratio between the property amount that is financed by the bank as a home loan in comparison to the amount that the loan applicant would have to use as the down payment for the house. Opting for a lower LTV increases your chance of getting the loan approval and minimises the EMI burden.

Use an EMI calculator: One can easily calculate his/her Equated Monthly Installment (EMI) using an EMI calculator. Using an EMI calculator helps the pensioners to calculate the monthly outflow of cash that one has to pay for the home loan. By getting an estimate, one would have a better understandability of the money flow and accordingly can apply for the loan as per their repayment capacity.
To calculate the EMI amount, one needs to enter the basic details such as loan amount, loan duration/tenure, the rate of interest and down payment into EMI calculator.

To obtain the best home loan, one needs to do a lot of research in the online marketplace. Compare the interest rates being provided on these loans and further choose the one which is the best and is in tandem with your requirement.

Here are some of the most common questions asked about home loan after retirement:

1. Can a retired person get a home loan?Yes, a retired person can get a home loan but only from the bank in which he/she has a pension account.
2. What is the tenure of a

   home loan for pensioners

   ?The tenure of a home loan will be up to 15 years or 70 years of age, whichever is earlier.
3. Can I get a home loan at the age of 60?Mostly banks would decline your home loan application because of the age. However, if you have a continuous source of income or assets that can be sold to repay the loan amount then you might get an approval on the application.
4. What is Loan-to-Value ratio?It is the ratio between the property amount that is financed by the bank as a home loan in comparison to the amount that the loan applicant would have to use as the down payment for the house.

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