Do this before you apply for a Home Loan
We compile a checklist of handy tips to bear in mind before and during the home loan application process.
Every new home buyer goes through a phase of confusion when they apply for a home loan. There are many technical aspects to study and understand, finances to accrue for the down payment, understanding the loan application process, etc.
There are certain things you might not be aware of before making the home loan application. So we compiled a guide of some important points you should know in order to ace your home loan application:
* Your eligibility decides the loan amount. It’s not about how much money you earn every month, there is a factor called the home loan eligibility that determines how much loan you will get. The eligibility is computed based on your age, number of working years left, city of residence, annual income, existing liabilities, etc. You can use a home loan calculator to calculate your home loan eligibility. Once you know your eligibility, you can use a home loan instalment calculator to know how much your potential EMI payment will be.
* You can clean up your credit history before you apply. The more loans you have to your name, the lower is your repayment capability. Your credit score is automatically lowered in this case, which reduces your eligibility. Even before you make the loan application, find out your credit score. If it is low, you can clear up your credit history by repaying existing liabilities. After this, you can proceed with the loan application. Use a house loan calculator at every stage to crunch the numbers.
* The property must have clear titles and perfect documentation.Your heart may be set on a certain property, but if there is some problem with its documents or titles, then the bank will refuse your loan application. Some properties figure on your bank’s blacklist — they may be inside old buildings, or there might be a loan default on it. Get the property documents checked by a lawyer specialising in land records before you make the application.
* You can opt for a pre-approved loan. Are you worried that the loan approval might not come through on time, and the seller might open negotiations with another buyer? Here’s a handy tip for you if you have already shortlisted a property but have not started the negotiations on it: opt for a pre-approved loan. The bank starts processing your personal documentation while you open talks for the property. The bank evaluates the house while you pay the first installment on it and complete the stamp duty and registration process. Thus, the loan amount is waiting for you right in time to close the deal.
