Ravi was looking forward to buying his own house. He had planned to take a home loan for the same. However, he was aware that lenders reject many loan applications, adversely affecting their credit score. Though he was ready to avail a home loan, he was wondering if his loan would be approved or not.
If you have been planning to take a home loan, and have the same doubt, here are some ways that can help increase your chances of a home loan approval:
Ensure you have a good credit score
A credit score is a reflection of your creditworthiness score above 700 is considered favourable for a home loan. A lower credit score can lead to rejection of your loan application. Similarly, a high credit score can improve the chances of loan approval and help you negotiate on the interest rates.
Therefore, ensure to check the credit score before you apply for the loan. If you have a poor credit score, it would be best to wait for a few months until your score is improved.
Pay a higher down payment
Experts opine that you can help expedite the process of a home loan by paying a higher down payment. Paying more from your pocket reduces the loan to value ratio. It also reduces the risk factor for lenders. In addition, you should reveal all the sources of income, monthly payments and obligations while applying, to help the lender get a clear picture of your financial standing.
Opt for a joint home loan
Your loan application can be rejected if you fail to meet the eligibility. If you are unable to fulfil the eligibility criteria of the lender, you can opt for a joint loan. Have a co-applicant who has a good credit score and has a stable income. You can take a joint loan with your spouse, parents and siblings. Having a co-applicant can significantly improve the chances of home loan approval. It can also help you earn a higher loan amount.
Ensuring accuracy of documents
Incomplete document submission is one of the major reasons for loan applications getting rejected. Ensure that you have all your documents handy when you apply for the loan. Moreover, the documents should be duly filed with accurate information. You can ask the lender representative to help you with documentation. Carefully fill the form, making no mistakes, especially when entering figures.
Opt for ready to move houses
The lender might be hesitant to give you a loan for an under-construction property, as there is always a doubt about the completion of the project. Instead, avail a home loan for ready to move property or houses, which are in their near completion stage. Even if you do buy an under-construction property, ensure that the developer or builder is credible and has a good track record.
Doing some homework on your part would help increase the chances of your loan approval. Check your home loan eligibility online by using a home loan eligibility calculator. Alternatively, availing a pre-approved home loan can also help you get your application approved instantly.
