6 Tips to Follow for a Successful Home Loan

There’s no denying that buying a home is one of the most crucial financial decision you can make in your entire life. This is why you need to know each and every aspect that impacts the approval or rejection of a particular loan application.

In case you are a prospective home buyer looking to get your loan disbursed without much complications, here are 6 essential tips to help you out.

Gauge Your Financial Situation

All the banks that offer a home loan these days intensely scrutinize your capability to repay the amount you apply for. Considering the fact that buying a home in India currently would, at the minimum, cost you INR. 40 lakh, you certainly need to have a proper plan to repay the amount. So whatever income documents you have, take a quick run to analyses them and figure out whether your current income allows you the luxury to get a loan without risking a financial meltdown.

Use the Co-applicant Feature

If you’re already sizing up options and filling up application forms, you must have come across the column that asks for a co-applicant’s’ name. Use this to your advantage. If you have a spouse who is also earning a sizeable income, you can use them as a co-signer. This will improve your chances of getting a better loan amount as banks allow you to club the net income of the signees. This will improve your chances of getting the loan you are looking for.

Maintain Your Credit Score

Important criteria called credit or CIBIL score can make or break your chances of getting a loan. So, if you have any current or previous loans, make sure to pay them on time without any default. As a majority of your application’s future will depend on these scores you should make improving your credit score a priority. Ideally you are expected to have a CIBIL score anywhere above 750 for banks to even consider your request.

Provide the Right Collateral

Whenever a lending institution offers you a loan with proper Home Loan Rates, it runs the risk of not getting the return on investment they were expecting as there’s a likely chance, however small, of your defaulting. Let’s explain this with an example; Mr. X applies for a loan despite having a less than ideal financial history. But he is willing to provide any sort of documentation to avail of the loan. He submits a personal property as collateral for the money he is borrowing, which the bank can foreclose on if he fails to repay. Despite this being a risk lenders offer a loan as they have a guaranteed return on their investment. So, if you feel you have a relatively sketchy financial history, providing the right collateral or guarantor can do the trick for you.

Pay More to Pay Less

Usually, when you apply for a loan, every bank expects you pay at least 10% of the loan amount upfront so that they can get your disbursement process started. So, if you have saved up enough money, you can use it as a down payment because the less you borrow, the less you’ll have to repay.

Choose the Right Property

There have often been instances when several apartment complexes by even reputed builders have landed in a huge trouble due to some illegal dealings. Banks tend to refrain from providing home loans unless the property in question is free from legal hassles of all sorts. So, make sure to research on trusted sites like Common Floor which has a huge inventory of trusted builder with the right credentials. Once done, you can rest assured that you’ll have the loan amount disbursed.

Follow these aforementioned tips to increase your chances of getting the loan you applied for and move one step closer to the property of your dreams!

[Source: http://loanwalle.com/blog/6-tips-to-follow-for-a-successful-home-loan-disbursement/]