1. What is Home Loan Eligibility?

The Home Loan Eligibility Calculator determines how much you can borrow based on your income, the lender's multiplier, and your existing debts. It helps you understand your borrowing capacity before applying for a mortgage.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( Income \) — Your monthly income (currency)
• \( Multiplier \) — Lender's multiplier (typically 3-5 times your income)
• \( Debts \) — Your monthly debt obligations (currency)

Explanation: The equation calculates your maximum loan amount by multiplying your income by a factor (determined by the lender) and subtracting your existing monthly debt payments.

3. Importance of Eligibility Calculation

Details: Knowing your eligibility helps you understand what price range you can afford, prevents over-borrowing, and improves your chances of loan approval.

4. Using the Calculator

Tips: Enter your net monthly income, the lender's multiplier (ask your bank for this number), and your total monthly debt payments (credit cards, car loans, etc.).

5. Frequently Asked Questions (FAQ)

Q1: What is a typical multiplier value?
A: Most lenders use a multiplier between 3-5, but this can vary based on your credit score, employment stability, and market conditions.

Q2: Should I include taxes and insurance?
A: Some lenders include property taxes and insurance in debt calculations. Check with your specific lender for their requirements.

Q3: What if my eligible amount is lower than expected?
A: You might consider paying down existing debts, increasing your down payment, or looking for a co-signer to improve your eligibility.

Q4: Does this include the down payment?
A: No, this calculates the loan amount only. You'll typically need additional funds for a down payment (usually 10-20% of the home price).

Q5: Are there other factors that affect eligibility?
A: Yes, lenders also consider credit score, employment history, property type, and loan term when determining final eligibility.