Aspire to buy your own home but worried about the home loan application process and whether your application will be approved? Don’t worry. Firstly, the entire process has become much simpler and if you choose the bank wisely, the eligibility criteria and paperwork will also be easy. For instance, you can easily access a loan repayment calculator online to check what loan amount would be best suited for your financial situation.
But before you apply for a home loan, take a look at these tips to make the process even smoother and ensure that your application is approved.
Add a Co-Applicant and Guarantor
Sometimes factors like a low credit score, income or a lack of FOIR (Fixed Obligation Income Ratio) can result in failure to meet the bank’s eligibility criteria, leading to a rejection of the loan application. In such cases, adding a co-applicant can help you get approval. This is because adding a guarantor makes it easier for the lender to trust you.
Try to Pay a Bigger Down Payment
Another great way of getting approval is to seek a smaller amount as loan. This means you will need to make a bigger down payment. Smaller loans are approved more easily but larger down payments might not be as easy. Consider saving or investing wisely to build a corpus before seeking a loan.
Choose a Longer Tenure
Choosing a longer repayment tenure can also improve your chances of approval. Since a longer loan tenure means lower EMIs for a longer period, it would make repayment less stressful and make it more aligned to the preferred FOIR. You can use an online EMI calculator to figure out the tenure that would be ideal for affordable EMIs. However, it’s worth noting that a longer tenure results in higher interest payments on EMIs. Therefore, also get an estimate by using a housing loan interest calculator before you decide on the tenure.
Build a Good Credit Score
Your credit score or CIBIL score basically represents your credit repayment history. A high credit rating is very important for getting the loan approved. All lenders check your credit history to figure out whether they can trust you with credit. Therefore, make timely payments of all credit card bills and other loans, since this boosts your credit score.
Get all the Documents Ready Beforehand
You will need some basic documents, such as proof of identity, age, address, along with previous bank statements, property papers, etc. Make sure you check with the bank regarding the documents they require with the application form and get them ready in advance. In case you need to update your address on your Aadhar card, do so beforehand as well, so that everything is in order at the time of application.
Last but not the least, avoid getting carried away while making a purchase. It’s advisable to first assess your financial situation before starting a house search. This will help you find a house that’s within budget.