Our personalities are imprinted in our homes. It is a heritage that is transmitted from generation to generation. Therefore, a home is one of the most essential investments a person can make. But they are undeniably expensive, and they are rarely acquired all at once. Therefore, 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 age-old saga of human finance and access to credit, the latter has often taken precedence over the former in the game of hourglasses. It is very important to understand that you should never be presumptuous in your credit applications. Maintaining a good credit score and being aware of it is always very important. If you follow this very basic golden rule, the consent for your loan will be sanctioned without any problem.
There is no right time, but there is always a right merchant and the right property
One of the major segments of buying a home is finding a property approved by general banking standards. The property you are looking to buy must be approved by the development authority of 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.
Commit to the transaction with the right interest rate and with your own contribution to the purchase
Each property buyer must provide their own Contribution Receipts (OCR) issued by the builder or seller. It is the margin of the money paid by the buyer out of his own pocket. It is usually 20-30% of the total property value.
Repay deferred contributions and verify eligibility
Your Credit Information Bureau (India) Limited (CIBIL) score, loan approval and settlement of your existing debts 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 mean the difference between getting it sanctioned or rejected. It is also very important to check your eligibility for a home loan beforehand 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’s always handy to have your documents and checklists ready ahead of time for a smooth process. An employee must be able to produce bank statements for the last 6 months, the last Form 16 and payslips. Whereas a self-employed would be required to show bank statements for the last 12 months, an ITR for the last 2 years and business proof.
The author, Milind Gowardhan, is MD and CEO of LEAF Fintech. Opinions expressed are personal
(Edited by : Anshul)
First post: STI