4 things that you should keep in mind while applying for a Home Loan

4 things that you should keep in mind while applying for a Home Loan

People these days have become more interested towards investing in housing properties. Investing in a housing property can always benefit with long-terms returns, which is why investing your funds in a housing property is found more fruitful than any other investment options. Though, a housing property can benefit you in the long run, seeing the current real estate rates, investing now might require a huge amount. However, since the rates keep on rising, now is the time when you should invest in real estate.

You need to have a good financial backup in order to purchase a property, which is not everyone’s cup of tea. There might be times when one wants to invest in real estate and might compromise on his decision as he lacks the financial support. Even if this is the situation, these days more and more people are looking forward to investing in housing properties. As the Home Loan rates have been lowered by the Reserve Bank of India (RBI), Home Loans have become a preferred option for many.

While availing a Home Loan, interest rates play a very important role. As the interest determines your Estimated Monthly Instalments (EMIs), it is significant that you take a look at the interest rates before availing them. Though Home Loan interest rates have been lowered down by the RBI, it is still essential that you choose a lender that offers you low interest rates. As the interest rates offered by every financial institution differ, no two lenders will offer the same interest rate. Thus, it gets crucial to compare the interest rates before availing a housing loan.

Besides Home Loan interest rates, there are other factors which you should not ignore before applying for a housing loan. Planning your Home Loan is equally important as selecting a housing property. As House Loans can be one of the important financial decisions for many, you cannot afford to go wrong while planning it. Hence, it is significant to acknowledge the following points before applying for a Housing finance.

1. Good credit score:

The RBI has made it mandatory for all the lenders to check the CIBIL score before approving the Home Loan application. This is why it gets important for every Home Loan applicant to check his credit score before applying. Having a good credit score can help the borrower with a smooth application process, whereas, a low credit score can get slow down your application process or it can also get your loan application rejected. The NBFCs are more flexible when it comes to CIBIL score, hence, it is more likely that your Home Loan application will be accepted by an NBFC than a bank.

2. Follow good banking habits:

The lenders also ask for your bank account statements during the Home Loan application process. The lender will keep a check over your bank statements to know about your banking habits, how frequently do you withdrawal and deposit money. By keeping a track on your banking habits, the lender will analyse your repayment capacity. It is important that you have a good banking habit in order to avoid any difficulty during the Home Loan process.

3. Clear all your debts:

In case if you have any debts to repay, then it is important that you pay them off before applying for a Home Loan. If you have a huge debt to repay, there are chances that the lender might not consider you eligible for a Home Loan.

4. Documents:

Submitting improper documents to the lender can also cause a problem while getting your loan approved. In case, if you submit improper or incomplete documents to the lender, they will reject your Home Loan application. Thus, it is essential to check your Home Loan eligibility and documents before submitting them.

These are some things that you should not ignore before applying for a housing loan application. If your loan application gets rejected, it will negatively affect your credit score or CIBIL score. If you have a negative marking on your credit report, the financial institutions will not be too forthcoming while approving your loan application in the future.

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