Tips to Make Sure Your Home Loan Application is Accepted the First Time!
easy availability of attractive home loans. There are tools, such as a home loan calculator, which make the process extremely simple. This has also led to significant growth in the home loan market. In fact, the housing loan segment grew 18.7% year on year in May 2019, according to data provided by the Reserve Bank of India.
But getting the best home loan is not always straightforward, since your application can get rejected in certain cases. Here are some tips to make sure that your application is accepted the first time around.
1. Maintain Your Credit Score
One of the first things that any bank looks for in a home loan application is the credit score. Your credit score is your history of taking and paying back loans. A good credit score indicates that you have been paying back all your debts, including credit card and other bills, on time. A healthy credit score tells the bank that there is a good chance that any loan provided to you would be repaid on time.
It is recommended to have a CIBIL score of above 750 since around 80% of home loan approvals are given to those with a score above 750. Anything below 600 is considered poor, and you should start working to improve it. You can use a CIBIL score calculator to calculate your eligibility for the loan.
2. Have a Stable Job
Almost all lenders want to give a loan to someone who has a stable job. So, if you are someone who likes to jump from one job to another frequently, you might want to change that. Having a stable job also lowers the chances of you defaulting on repayments. That is why most banks prefer that the applicant has held their job for at least 2 to 3 years.
The nature of your job, as well as the company in which you are working, can also have an effect on whether your loan application gets approved. Therefore, it is recommended to highlight your professional achievements, bonuses and increments in the application. It is also a good idea to work with a company that has had a stable financial track record.
3. Get a Co-Applicant
To better the chances of your loan application being approved on the first try, getting a co-applicant can be a great strategy. Borrowers often face problems, such as debt to income ratio, low credit score and a minimum income. All of these can be solved by having a co-applicant. Having a co-applicant can also make you eligible for a larger sum. This is especially true if the person has had a long relationship with the bank. The co-applicant can be your parent or spouse. Using a house loan calculator to find out how much loan you can apply for can be a good idea.
However, the debt to income ratio of the co-applicant should not be greater than 40% to 50%, as it could lead to rejection or a high interest rate.
Getting a loan has become an incredibly simple process. There are tools, such as home loan instalment calculator, that allow you to know about the EMIs and tenure that would suit you best.
