Banks believe that the ability to repay one's housing loan is based on one's income and expenditure pattern. Since it is difficult for banks to estimate the monthly expenses of each borrower individually, they use a pre-determined percentage of one's `net' income, known as Fixed Obligations to Income Ratio (FOIR). Most banks restrict FOIR to a maximum 45-50% of monthly income. This implies that the higher the income, the higher the amount that can be spared for paying the EMI. Also, the longer the tenure, less the EMI will be. Invariably, for the same income, the eligibility for a longer tenure loan will be much higher.

Any outstanding loans will tend to reduce chances of getting a high loan amount. So, prepaying the existing loans in full or part will help. If the they find  income insufficient, then they can opt for a joint loan with his wife. This would also help increase their loan eligibility. But home loan is a long-term commitment, typically 20-30 years. They need to be sure about the continuity of both their incomes to be able to jointly take up such a long-term EMI commitment. It is understandable that may be keen to buy a house of their own, but they must be sure that they do not over-commit in their enthusiasm and make hasty financial decisions. They must make an assessment of their finances before choosing a property.