5 Tips to Avoid Getting Rejected by a Home Loan Company

 

 

For millions of Indians, owning a home is a lifelong ambition. However, real estate prices are increasing across the country, making it necessary to arrange for a home loan. However, extensive research and submission of required documents may fall short of getting their loan application approved for loan applicants. Before granting a loan, banks check essential criteria such as home loan ke liye documents, a good credit score, and a stable income flow to evaluate applicants.

If you are concerned about your home loan eligibility, follow the tips given below to avoid being denied a loan.

Tips for Getting a Home Loan

The following suggestions can assist you in getting a house loan secured quickly.

• Pay higher down payment

The first step an applicant can do to get his loan application approved is to make a higher down payment on the property. Even though banks can lend 80-85 per cent of the property's value as a loan amount, it is better to prepare for a higher down payment. This improves your credibility and gives them the confidence to lend, and your loan application is more likely to be approved because you have less debt.

• Apply for home loan subsidy

First-time buyers under the LIG/MIG category can check for home loan subsidy eligibility under the PMAY scheme. Qualifying under the scheme ensures you need to borrow less from the bank. This further benefits you as your repayment capacity is reviewed favourably by the potential lender allowing you to get the loan approved.

• Improve your credit score

Before issuing loans, lending institutions check the loan applicant's credit score. Those with excellent scores are often preferred. You can raise your score by taking the following steps.

• Clear all your debts before applying for a home loan.
• Paying all your credit card dues on time without fail is essential.
• You should not apply for multiple loans from different institutions as it harms your credit history.
• It would help if you did not switch jobs frequently. To qualify for a house loan, you must have a consistent and stable source of income. If you have a job, submit all essential documents for home loan eligibility for the salaried person.
  

• Apply for a joint loan

Applying for a joint home loan is another effective way to get your loan application accepted. You can file with any working family member in your family (spouse, father). This increases your chances of securing a loan. Sometimes, the applicant is over the age of 50. Banks are hesitant to lend to such applicants; in this instance, requesting a joint loan with your working son or daughter is a wise option.

Furthermore, certain institutions provide females with loan interest rate subsidies, which you can take advantage of if you apply for a joint loan with your wife.

• Apply for a long tenure

If you are new to the job and have a low starting salary, it is best to apply for a loan with a more extended repayment period. This decreases your EMI cost while also assuring the potential lender of your repayment capacity. In addition, the affordable EMI ensures that you are in the low-risk category, and your chances of obtaining a loan improve.

In addition to the suggestions mentioned above, it is critical to submitting all relevant home loan ke liye documents as requested by the lender. This will ensure that your home loan application gets cleared without issue.

Things You Should Accomplish Before You Turn 30

While turning 18 and then 21 are momentous occasions because each milestone opens up a world of opportunities for us, turning 30 is more about the emotional impact. What is it that makes one think that life is all downhill after 30? Maybe it is the knowledge that many of the most successful people in the world achieve their glory before the age of 30. For instance, Steve Jobs founded Apple at the tender age of 21, while Mohammed Ali became the World Champion at 22. Then there was Mary Shelley, who wrote the still popular Frankenstein at 21, Bill Gates earned his first million by 23, the same age as Isaac Newton when he created Calculus, which hounds us to this day.

So, what do you want to achieve before you turn 30? Would you want to buy your own home, even if you need to take a home loan? Here are some worthwhile goals. 

Pick Up a New Skill to Enhance Your Career

It is never too late to learn something new or gain a new skill. So, consider what courses could help you along your career path. There are plenty of online courses available these days, from languages courses to specific vocational skills and knowledge training. You might just want to look them up.

Savings

And it is never too early to start saving. While you still have lesser responsibilities, you can put away part of your income towards building a solid nest egg for your later life. Check out your options for investments, from insurance policies to mutual funds, ULIPs and even fixed deposits. Invest according to your risk appetite and make sure you diversify your portfolio, while also keeping aside some liquid funds for emergencies. The earlier you start, the more you will gain from the compounding effect of interest rates.                              

Tax Savings

Did you know that many of the investment vehicles in India entail tax benefits? In fact, even if you take a home loan, you can use the repayment installments to gain tax exemptions. Life insurance, health insurance and various savings schemes available in the country are eligible for tax benefits under the Income Tax Act of India. So, make sure you find out which ones these are and start investing while also saving on taxes.

Build Your Network

According to Global Web Index, usage times for social media sites rose from 1.66 hours per day in 2013 to 1.72 hours per day in 2016. You have sites like LinkedIn that can help you improve your professional network. This networking could improve professional credibility and give you an edge when you need career help.

Buy a Home

While this might seem like a big ask, buying a home isn’t as monumental a task as it used to be. With the easy availability of home loans, convenient repayment options and more, the sooner you think about owning a home, the better. In fact, with the real estate sector in India being on a downward spiral in recent times, investing in property could make sense now, before prices start soaring again.

As HW Longfellow wrote, “….and Time is fleeting,
And our hearts, though stout and brave,
Still, like muffled drums, are beating
Funeral marches to the grave.”

While you still have time, make the most of what life has to offer.

Home loan facts: 5 things to know before you sign up

We list the five most important facts that you must do before you formally apply for the home loan.

Are you about to apply for a home loan? We have only three activities to suggest: Research, research and research! Consider the following five points to get you started:

1. Understand what loan eligibility means. Banks and lending institutions offer about 60 times your current income as the home loan amount. You may have a high salary, but that may not automatically translate into a high loan eligibility. The lending institution will consider the prominent components of your pay package, while setting aside the LTA and Medical Allowance. The eligibility is then calculated on the basis of the remainder amount. Use a loan eligibility calculator to find your eligibility.
2. How much EMI is too much? Normally, any EMI that exceeds 30% of your finances is not ideal, and an amount exceeding 50% is a stretch. Your monthly budget must not be strained owing to the EMI payable. Use a home loan EMI calculator to compute how much you will pay the lending institution every month basis the loan amount, tenure and interest charged on it. You can keep manipulating the figures using the home loan calculator to arrive at a figure that suits your budget.
3. A pre-approval is important – here’s why. Normally, people apply for a home loan after they have found a suitable property. This is a good approach, but taking a pre-approval is even better. Taking a loan approval tells the lender that you are a serious buyer who is about to take a loan in the next few months. The loan approval checks your personal eligibility and helps you understand how much your borrowing limits are.
4. An expert must see the property documents. It is always a good idea to appoint a lawyer to study the property documents. This is important to verify the document’s layout, authenticity, chain of agreements (in case of two or more past buyers), permissions (in case of under-construction projects), titles and freehold, etc. Get any lacunae corrected before you apply for the loan – unsuitable properties are not liable for home loans. Rectifications at a later date will result in delays.
5. The interest rate is everything. Ultimately, the interest charged on the loan amount decides the monthly outgo. A lower rate of interest helps you save more money. You can opt for a floating rate of interest if the market rates are expected to slide in the next few months. Another good measure to save money is to repay the loan early, i.e. before the tenure ends.