Buying a home is a long-term decision. It can take months or even years for a homebuyer to materialise his dream of owning his dream house. Furthermore, buying any property, especially a home, requires huge investments. Thus, many potential homebuyers turn towards a home loan to make their dream come true.
Many housing finance institutions and banks offer home loans at a competitive rate. However, to avail of this home loan, one must fulfil specific home loan eligibility listed by the concerned lender. Failure to fulfil the housing loan eligibility may lead to rejection of the home loan.
Tips to Improve Chances of Getting a Home Loan Approved
Checking home loan eligibility criteria is crucial to the entire home loan process. The easiest way to calculate home loan eligibility is to use an online tool called a home loan eligibility checker. Typically, banks and financial institutions set certain criteria, determined by the age, income, credit score, job type etc., of the borrower.
This home loan eligibility for a salaried person or other individuals must be met to get the loan approved. If the potential homebuyer fails to meet these criteria, the loan application may get rejected. However, there still stands a chance to enhance the same.
Here are a few simple tips for borrowers to enhance mortgage loan eligibility and get the home loan approved:
Repay existing loans and debts
Banks and other lenders consider the debt-to-income ratio as one of the crucial aspects of accepting a loan. Hence, paying off outstanding debts and loans is highly recommended to improve one’s credit and eligibility score. In the long run, obtaining a loan for any other purpose can also become easier if the credit score is good.
Maintain credit scores
CIBIL score, also known as a credit score, is a three-digit numeric summary showcasing individuals’ creditworthiness. These scores reflect the borrowers’ credit history, the ability to pay off the debts, and how good they are with investments. One’s repayment history and ability to make timely EMI payments also speak a lot about their credit score.
Choose a longer home loan tenure
By opting for a longer-duration home loan, it can reduce the burden of EMIs for the buyer. Thus, the buyer can then manage the budget, reducing the chances of him getting defaulted. This, however, increases the home loan interest payable.
A quick tip: One can opt for a long-term loan and make part-payment with surplus funds to reduce the interest outgo.
Pay a higher down payment
Instead of opting for high-value loans, try paying a bigger amount as a down payment while buying a home. There is a basic understanding that the fewer funds one borrow, the lesser the repayment burden. This way, it is easier to ensure that the Equated Monthly Instalments are not too expensive.
Opt for Joint Home Loans
Housing finance companies and banks usually offer the co-applicant feature. The borrower, along with a spouse or parent or both, can apply for a home loan for improved eligibility. Since the EMIs can be better managed with joint loans, the chances of getting the home loan approved increase, which means fewer hassles of looking for more lenders.
Disclose any additional source of income
An additional source of income is an essential criterion for a home loan. Therefore, one should disclose any additional income like rentals or income from a side business to the lender to increase the chances of getting the loan approved in the first instance.
Provide correct details
Providing incorrect details is undoubtedly one of the significant factors that can lead to the rejection of a home loan. Therefore, one should provide the lender with updated personal and credit details. Any discrepancies in the information provided may have a negative impact on the loan application status.
Choose the right lender
Since numerous lenders offer home loans, choosing the right one becomes essential. Firstly, it is always best to choose a lender who is aware of the borrower’s financial history, like their bank or the one who holds credibility in the market and offers attractive rates. Furthermore, opting for a lender who knows the borrower’s financial history increases the chances of a loan getting approved, provided all issues have been resolved, if they were any.
Conclusion
Buying a dream home is not merely a financial decision. It provides a sense of security, accomplishment, and stability. Thus, one must consider the above tips to enhance their housing loan criteria for getting a home loan approved in the first instance.
Piramal Realty offers contemporary and luxurious residential spaces with high quality and safety standards in Mumbai.
Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim /disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.
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