Taking a home loan is not that easy as it sounds. As you are borrowing a hefty amount that needs to be repaid along with interest, it can sometimes dent your finances very badly. Therefore, it’s important to have proper planning to prevent yourself from additional financial stress. Before you opt for a home loan, make sure you assess your repayment capacity so that your loan application doesn’t get rejected by your lender. A home loan rejection can affect the credit score of the borrower and will also raise a red flag for other lenders. To ensure that your home loan is approved without any hurdles, follow these 5 effective tips to get a home loan approved instantly:
Know your credit score: Credit score plays a major role in the loan approval process. If the credit score falls below the minimum criteria, lenders can deny your home loan application. Apart from the requirements of a high credit score, frequently missed payments, and delays in paying debts can stop the processing of Home Loans. To avoid last-minute discrepancies, it is necessary to maintain a good credit score, pay bills on time and lower your debt amount.
Know your financial condition: Before applying for a home loan, make sure to assess your repayment capacity. It’s important to clear your EMIs on time. Many lenders will also check your salary slips to assure that you will be able to repay your loan on time. Hence, knowing your repayment capacity is essential while taking a home loan,
Pay higher down payment: Once you know the cost of your property, you are willing to buy, try to pay at least 20% of the total amount as your down payment. This would mean that if you borrow less money, you will have to pay backless. You might also get the loan at a lower interest rate, and lenders may treat you as a customer who poses a low risk to their finances.
Pay off old debts: Before applying for a new loan, it’s important to clear your old debts. Lesser the debt, the higher are the chances to get the loan. The lenders evaluate your debt-to-income ratio to approve your loan amount. Having numerous Credit Cards or debts can lower the chances of getting a home loan. And even if you get the loan, you may get a less amount at a higher interest rate.
Take advantage of the Co-applicant Feature: Having a co-applicant can increase the chances of getting a home loan. Your parents or spouse could be your co-applicant. This can significantly raise chances of getting your application approved, especially if your co-applicant is also earning a sizeable income. Banks or other lending institutions combine the net income of your parent or spouse with your income while applying for a loan. This assures them that you are quite capable of paying their loan back in time, even if your income alone does not qualify you as an eligible borrower.
Pay attention to the application form and documents: If you do not fill your loan application correctly, your home loan application might get rejected. Go through the form carefully and read all the clauses carefully so that you might not regret it later. Avoid making mistakes with your account numbers and salary details.
In short, these above-mentioned steps will not only help you get a loan easily, but you can also enjoy lower interest rates and better offers.
