Owning a dream house is a dream for many, and a home loan can help you realize your dream. With a home loan, you can get funds not just to buy a house but even to construct a new home or make repairs and renovations to your existing house.
How To Get A Hassle-Free Home Loan?
There are a lot of myths that you hear when looking for a home loan. While the home loan process requires accurate documentation and a good credit score, the entire application process can be hassle-free if you keep the following simple tips in mind.
Clear Off Existing Dues
A home loan is a long-term commitment, which means having any extra financial burden will not only impact your chances of getting a home loan, but it will also put a dent in your budget.
Hence, it’s a good idea to clear off any existing loans you may have before you apply for a home loan.
Maintain A Good CIBIL Score
A CIBIL score is a score given to every person based on their past credit history. The CIBIL report is an essential element of any loan application, but especially for a home loan. The report includes all your past borrowings and repayment patterns, which lenders assess to determine your credibility.
A credit score of 750 is usually considered good enough for a home loan. If you clear off your existing dues and pay all your credit bills, it can help improve your credit score.
Some lenders might accept a lower credit score, but you will need to provide more security against the loan.
Apply With A Co-applicant
A joint home loan offers a lot of benefits, the primary one being that it reduces the loan burden on one person. If you apply with a co-applicant, the lenders will be confident of your repayment capability since there is a double source of income, which increases the chances of getting your loan approved.
You can also avail a higher loan amount if you borrow with another applicant since lenders get additional security. The co-applicant can be any earning family member, and most people usually co-borrow with their parent or spouse.
Pay More Downpayment
Generally, a home loan is granted for only 80-85% of the property value, which means the rest is paid out of your pocket. If you make provision for a higher downpayment, you can comfortably cover additional home expenses, like registration costs and sale deeds.
As a general rule, try to pay at least 20% of your home cost as a downpayment so that your loan can comfortably cover any remaining expenses.
Opt For A Long Tenure Loan
Home loans are always longer-tenured than any other loan, with an average time of 5 to 20 years. However, some banks even offer loans for up to 30 years. You may not want to carry a financial burden for so long, but if your loan is long, your EMIs will be lower.
You can use a home loan EMI calculator to determine your EMI for a specific tenor. This way, you can get an estimate of what you need to pay every month and set a budget accordingly.
Pick A Reputed Lending Institution
In addition to ensuring a smooth application process, the right lender can also help you with repayment. Research your options and choose what fit your needs and budget the best.
A home loan can be availed in a lot of ways and not just from banks. NBFCs usually have a lot of great schemes for housing loans, and if the primary applicant is a woman, you can even save on interest rates.
Make Sure You Have All The Required Documentation
Having all the right documentation ready to be submitted when you apply for a home loan ensures that your loan process is hassle-free. Following are some of the common documents you need for a home loan.
- Filled application form
- Identity proof, like an Aadhar card or PAN card
- Residence proof, like utility bills
- Proof of education qualification, like passing certificate of your highest qualification
- Credit score report from CIBIL
- For salaried individuals, salary slips for the last six months and IT returns for the previous three years
- For self-employed individuals, profit and loss statements, balance sheets, and IT returns for the previous three years
Conclusion
You need to be careful with your home loan application because the slightest mistake can raise a red flag to all other lenders, so you need to be careful. Before apply home loan ,The above tips can help you with an easy process if you meet all the eligibility criteria and prepare all the necessary documentation.
Before applying for a home loan, be sure you are prepared. Take the time to understand your financial situation, get on top of your credit score, and have clarity about what you’re looking for in a home loan. This can help to ensure that you are fully ready when the time comes to approach your lender—and also give you an advantage over those who only rush towards their goal without preparation.
Getting your home loan approved is just a standard process that involves filing out some documents and taking care of some small details. It’s not supposed to be a stressful affair. And it doesn’t need to be one. Therefore, be sure to keep an eye on the road ahead, and take the necessary precautions to make sure that you get your application approved as smoothly as possible.
Know your lender requirements and arrange to have the required information readily available. This will help ensure you can be pre-approved for a loan before you start looking for a house. The last thing you want is to miss out on the perfect home because all the paperwork wasn’t in order, right? And remember to research different loan schemes so that you can get the best loan offer as per your requirements and budget. But don’t worry, we are always here to help you. Read this article for sure you’ll find the solution.