Retirement is a time to relax and enjoy your free time at home after spending years in a job. However, many senior citizens may have delayed purchasing a house and may now be looking to buy one after retirement. In that case, if they have the required cash, there wouldn’t be any problem, but if they want a home loan, either partial or total amount, they may have to go through various troubles due to the age-related restrictions and banking norms.

Nonetheless, despite the complexities of a house loan after retirement, it is still feasible. One of the main reasons for denying home loans to senior citizens could be the lack of consistent income. For lenders, income stability is the foremost consideration in a loan application.

Also Read: What Amenities Should Senior Citizens Look For When Buying A Home?

Some of the eligibility criteria of a home loan for senior citizens include:

A. Age Limit: Typically, the maximum age to apply for a home loan is between 70 and 75 years. Loans should ideally be repaid by the age of 75.

B. Income Stability: Stable income source is a key factor in loan eligibility. Banks prefer people who have stable income streams such as pension, rental income, investments in mutual funds, fixed deposits, etc., when evaluating home loan applications for senior citizens.

C. Repayment Tenure: The maximum loan tenure for senior citizens is usually 15 years, depending on the lender. Loans have to be paid back by the age of 75.

D. Existing Debts: Seniors who are debt-free have a significant advantage when seeking for a house loan; banks are more likely to accept applications from people who are debt-free. So, a heavily indebted person may need a co-applicant or a guarantor.

Here are some tips for securing a home loan for senior citizens.

1. Add A Co-Applicant: “One of the most effective ways for senior citizens to improve their chances of securing a home loan is by applying with a co-applicant who has a steady income. A younger, employed co-applicant not only boosts the likelihood of loan approval but also increases the potential loan amount,” says Atul Monga, CEO and co-founder of Basic Home Loans, an online fintech platform that facilitates home loan services to customers.

2. Opt for Lower LTV: Deposit a higher margin to lower the loan-to-value ratio, which can improve your eligibility for a home loan.

3. Avoid Multiple Applications: Applying for several home loans at once will lower your credit score and reduce your loan approval chance.

4. Maintain A Good CIBIL Score: A high CIBIL score is vital. Always ensure you handle your debt properly and avoid having huge debts on credit cards or personal loans.

Monga added, “The most significant challenge for senior citizens is often the lack of a consistent income. Seniors might boost their chances of acceptance by choosing a lesser loan amount; explore secured loans backed by assets and choose public sector banks which may offer more lenient criteria and lower interest rates.”