Most aspiring homeowners in India rely on getting a home loan to make their dream home a reality. However, as getting a home loan involves borrowing a large amount, the lenders approve their application only after a lot of consideration to ensure that they lend to the right person with the financial capacity to repay the amount on time.
While you may take all the necessary precautions while preparing your home loan application, a small mistake can result in your loan application being rejected. This, in turn, can affect your credit score and even raise a red flag for other lenders. So, if you are a first-time home loan borrower, the following tips will help you improve your chances of getting approval for a home loan.
Get a co-applicant or apply for a joint home loan
If you can, try to get your spouse, sibling or any other family member as a co-applicant. This will significantly increase your chances of getting home loan approval, especially if the co-applicant has a stable income and a high credit score. Additionally, most lenders allow you to club the net income of the co-applicant with your income, and you may be eligible to borrow a higher loan amount.
Maintain your credit score
There are many ways to boost your chances of getting home loan approval. One of them is maintaining your credit score. All lenders check your credit score before sanctioning your loan. The credit score reflects your past credit behaviour and current creditworthiness. Financial organisations check your credit score to assess your financial capacity to repay the loan on time.
To maintain and improve your credit score, you must pay off all your dues, including personal loan EMIs, credit card bills, etc., on time. Also, avoid submitting multiple home loan applications at the same time, as it will affect your credit score negatively. Know the minimum credit score requirement of the lender (generally, lenders prefer giving loans to people with a credit score of 750 or more) and apply with the right lender accordingly to get immediate approval and a better offer.
Pay a higher down payment
Once you know the exact price of the property you want to buy, try to pay at least 20% of the cost as a down payment. This will help you borrow less, and a lesser loan amount means you can easily repay the amount. Also, when you borrow less, the lender may consider you a risk-free borrower and process your home loan application faster.
Be careful while filling out the home loan application form
One of the most common reasons for having a home loan application rejected is an incorrect application form. So, when you fill out the application form, be careful with every detail you must therein. Always be honest and provide the income, profession, and property-related information accurately, as the lender will cross-check them later while processing your loan.
If you don’t understand anything or are unsure what to fill in, seek help from the lender’s customer care executive. Also, be thorough with the form to know if there are any hidden clauses which may catch you off-guard later.
If there are no discrepancies in the information you mentioned in the application form, you have a high chance of getting a home loan approved.
Getting home loan approval requires careful planning and diligence. Use the above tips to get the desired loan without any hassles.