Buying a house is everyone’s dream, however, with the rising prices, it is becoming increasingly difficult to fulfil this dream. However, this problem can be solved thanks to Home Loans that you can avail from banks and NBFCs (Non-Banking Financial Companies).
Applying for a Home Loan is simple enough; the problem arises when you need to get this loan approved. Here are a few useful tips that can help you get your Home Loan Approval in no time.
- Check the valuation of the property: Before any bank approves your Home Loan, it would first conduct its own valuation of the property so as to determine whether the loan amount is similar to the market value of the property.
- Avoid any kind of additional debt: Most customers usually feel that once they have been approved for a loan they are not answerable to the bank anymore. However, the banks usually monitor your credit activity for around three months till the entire registration of the property is completed.
Therefore in case you default on a payment of your Credit Card or take on an additional loan, your credit provider may change the pricing of your loan altogether or even decline the loan in extreme cases.
- Save for a deposit: Essentially most credit providers would not give you a 100% loan for your home. Having enough for an initial deposit (also known as cash down payment) proves to the bank that you are able to save and this, in turn, increases the chances of your Housing Loan being approved.
- Home Loan pre-approval: Like prevention is better than cure, if you get pre-approved before you apply for the loan you can look for a house in peace as you know whether you qualify or no for the loan. In order to get pre-approved, all you need to show the bank is your latest pay slip, past three months’ bank statement along with a copy of your identity proof, and current residence proof.
- Check your credit score: In order to get approval for any loan, you need to have a good credit score. To ensure that your credit score is good you need to check your credit score regularly. You can check your credit score once a year. You can also purchase a report for a nominal fee from most credit bureaus. Having a clean credit score is important to ensure that your path to getting your Home Loan approval smooth.
- Make sure you can repay: One of the most important aspects of getting a loan is that you should be able to repay your loan. Most banks would usually explore the existing financial commitments and your current living expenses.
- Reduce unnecessary debt: The number of financial commitments or Personal Loans you have can play a major role in the approval of your Home Loan. If you have too many Credit Cards it is important to reduce this number to none or just one. Also, you should try and reduce the amount that you use from your Credit Card so that the bank or other financial institution can know that you are able to live within your means.
- Don’t apply to too many places: It is important that you compare the different kinds of loans that are available to you as different lenders have different interest rates. However, you should only apply to a few places. You should carry out all of your research and only apply to those places that you are interested in.
- Stable employment: Having a steady job can help you get the approval of your Home Loan quicker. Most banks would need you to show them your previous months’ payslips along with bank details. If you have changed your job in the past six months, it may cause some problems when it comes to applying for a Home Loan.
- Be open with information: You should never try to hold back any kind of information from the bank. If the bank finds out that you have not been open with them and uncover a Credit Card or some other debt that you have, it could be a deal breaker and you may not get the loan that you need. This would also go a great way in helping you speed up the process of your Home Loan approval.
Each institute has its own procedure for Home Loan approval. Hence, whichever you choose it is usually a simple process if you follow the tips mentioned above.
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