Our personalities are imprinted in our homes. It is a heritage that is passed down from generation to generation. Therefore, a home is one of the most essential investments that a person can make. But they are unquestionably expensive, and they are rarely acquired all at once. As a result, having easy access to credit becomes essential in the home buying process.
Here are six suggestions to follow to ensure a smooth home loan approval:
Credit where credit is due
In the secular saga of human finance and accessibility to credit, the latter has often taken precedence over the former in the hourglass game. It is very important to understand that you should never be presumptuous in their credit applications. Maintaining a good credit score and being aware of your score is always very important. If you follow this very basic but golden rule, the approval for your loan will be sanctioned without any problem.
There is no right time, but there is always a good trader and the right property
One of the main segments of buying a home is finding a property approved under general banking standards. The property you are looking to buy must be approved by the development authority in the city where you reside. After the appraisal, the next step is to verify the title flow of the property, for which a title search certificate is a necessity.
Entry into the business with the correct interest rate and with a contribution specific to the purchase
Each property buyer must provide their own Contribution Receipts (OCRs) issued by the builder or seller. It is the margin of the money paid by the buyer out of his own pocket. It is generally 20 to 30% of the total value of the property.
Refund delayed contributions and verify eligibility
Your Credit Information Bureau (India) Limited (CIBIL) score, your loan approval and your existing debt discharge form an equilateral triangle; they are all equal factors in the home buying process. A higher credit score before applying for a home loan can be the difference between getting sanctioned or rejected. It is also very important to check your eligibility for a mortgage first after choosing the right property and the right lender.
Joint loans can be an advantage
A borrower can apply for a loan with a co-applicant to increase their EMI repayment capacity. Lenders view a shared home loan as a low risk investment and therefore approve it on favorable terms.
Keep documents ready
It is always handy to have your documents and checklists ready in advance for a smooth process. An employee must be able to produce bank statements for the last 6 months, the last Form 16 and salary slips. While a self-employed person would be required to present bank statements for the past 12 months, an ITR for the past 2 years and business proof.
The author, Milind Gowardhan, is Managing Director and CEO of LEAF Fintech. Opinions expressed are personal
(Edited by : Anshul)
First publication: STI