Imagine you save money from past four to five years, do a bit of research on which lender is the best to avail housing finance, find your dream home and finally give a home loan application which is you may find later is not approved! Shattering, isn't it? For a moment you see all your dreams breaking into pieces.
Well, being approved for a housing loan is one of the biggest obstacles you may encounter if you don't have proper documentation in place; no stable source of income, low credit score or the property is not located in a good arena and seems too old to finance it.
Well, there are many reasons for your home loan application disproval. If the lender doesn't find you as a financially trustworthy applicant, it's most likely that you shall be deprived of getting housing finance.
So, there are definitely some preparations that you can make to improve the chances of approving your home loan without any hassles.
Show your willingness to save
Any bank or finance companies will approve an amount of around 80-85% of the property value. The remaining margin money needs to be shown by the applicant at the time of loan approval. So, make sure you transfer some funds to your savings account every month towards "home deposit" and show the lenders how serious you are about savings funds for house and bridge up the remaining costs.
Credit Card Debits
When it comes to approving your loan, nothing is worse than the debts being held on your credit cards, personal loans, or car loans, etc. Any form of debt being held means it will seriously hamper your credit score. So, make sure you improve this by making payments on time and clear the outstanding debts. Remember, a good credit score is a key to impress the lenders for easy approval of your loan.
Job Stability & Income Source
Most people keep switching their jobs for better prospects, however; it will affect your home loan application status. This is because lenders are keen to offer money to someone who can assure them the stability of income source and job reliability. So, a piece of advice would be if you're planning to apply for a home loan don't change your job at least for a year or two and also during the entire event of loan application and approval.
Pre-approved letters are like a wild card which you can present to the current lender. This works as an assurance that you're sincere and capable of affording the loan amount that you've applied for. It can truly help you to streamline your mortgage process and boost your chance of getting the home loan application approved.Getting a loan approved is definitely not a cakewalk.
It requires a meticulous planning about your loan eligibility, your savings, good credit history, and better job or business stability which can vouch for you in front of the lenders for loan approval. Therefore, follow these simple tips and improve your chances of a loan being approved. May you achieve your dream of owning a house soon!