With the RBI lowering its repo rate by 25bps in 2019, the MCLR for home loans has also come down significantly, making it easier for people to avail home loans. But even with such easy access to home loans, sometimes applying for advances can be challenging and thus making it difficult to get your loan approved.
There are a few factors that influence the process of getting your home loan approved. It is crucial to keep these factors in mind while applying for home loans in India with any financial institution.
Things to Bear in Mind to Avail Home Loans Easily:
Read the following pointers to make sure that your home loan gets approved without any problem:
- Aim to Make Higher down Payments:
After learning the cost of the property you want to purchase, try to make a down payment of at least 20% of the amount. Making a bigger down payment means you have to borrow a lesser amount of money. Borrowing less means you will have to pay back a lesser amount of money.
Making a bigger down payment might also enable you to get a lower rate of interest. Lenders also consequently treat you as someone who poses less risk of defaulting and give you attractive home loan offers to avail.
- Maintain a Good Credit Score:
Having a clean financial record enables you to hold a higher CIBIL score. Your CIBIL score helps to inform lenders about how you have handled your previous dues and repaid them.
To maintain a good CIBIL score, make sure you maintain a clean financial record. Make sure that you have no unpaid credit card debts. Also, bear in mind that multiple applications for loans can adversely affect your CIBIL score. So, make sure you choose your lender carefully so that your loan gets approved without hassle.
- Apply for a Joint Home Loan:
There are several benefits of applying for a joint home loan. The biggest of them is that it increases the overall eligibility. The pooled income of you and your co-borrower poses a lower risk to financial institutions in terms of repayment of the loan. Both the borrowers can avail tax benefits on housing loan interest rate with a joint home loan.
- Have a Good Estimate of Your Financial Conditions:
One of the primary requirements to avail home loans in India is to make sure you can pay the EMIs on time. Thus you need to have a clear idea about your finances to pay back your loan comfortably.
Knowing your repayment capacity is key to getting your loan approved easily. You can calculate your EMIs easily by using the housing loan EMI calculator.
The factors mentioned above can help to get your loan approved with ease.
Make Sure You Submit the Proper Documents:
Sometimes, your home loan application can be rejected even after following all the conditions mentioned above. Problems with documentation are the most common reasons for rejecting a loan application.
Thus, to make sure that you get home loans approved, make sure that you have the following documents ready while making a home loan online application:
- Proof of identification: passport, driving license, ration card, pan card, etc.
- Proof of age: birth certificate, class 10 mark sheet, passport, driving license, etc.
- Address proof: voter’s ID, bank account statement or passbook, passport, utility bills, etc.
- Income documents: letter from employer, Form 16, payslip for the last two months, IT returns for three years, etc. constitute home loan documents for salaried individuals. Income tax returns from the last three years, the firm’s balance sheet and profit and loss account from the last two years, etc. are required for self-employed individuals.
Apart from these, you may also have to submit any other document in case the lender asks for. Keep all these documents handy to ensure the approval of home loans in India with ease.