10 Smart Tips For Easily Getting Your House Loan Approved
In the end, you have found the perfect home for you and your family after a long search. You’ve looked at a lot of property websites, visited a lot of places, and now you have found it! Congrats! It would help if you still got the home loan approved before moving into your dream home.
Tip #1: Before applying, work on increasing your credit score
A good credit score and credit history help you get a home loan. Having a credit score of 750+ makes you more likely to be approved. It helps you get many home loan offers from the best lenders at the best rates. That said, it’s not possible to build your score overnight. Depending on how bad your score is right now, it can take anywhere from 3 to 24 months to improve your credit score. You should start working on your credit score now if you want to get a home loan in the next year, so do that now.
Here are some specialties you can do to enhance your credit score:
- When you’re ready to start, you can check your credit score for free. This shows you where you are and what needs to be done.
- Credit card bills and EMIs should never be paid late or missed. Pay them back on time and in full.
- Don’t spend all of your money on your credit card simultaneously. Try to keep the utilization rate below 30%.
- Do not have too many long-term loans. It would help to close a few small loans before applying for a big home loan.
Tip #2: Organize and clean up your credit report
It’s also a good idea to look over your credit health report. Credit bureaus make your credit report, and there may be mistakes because lenders don’t report everything they should to the bureaus. Keep an eye on your credit report to make sure it’s up to date and that there aren’t any mistakes in it.
As soon as you notice mistakes on your credit report, you should report it to the credit bureau and have it fixed. Also, home loan lenders check your credit report before giving you a loan for a new home. Hence, it’s essential to keep it free from errors.
Tip #3: Get a Joint Home Loan
As a group, it’s more likely that a home loan will be approved. With the help of your spouse or any other member of the family who makes a loan, you are more likely to get a home loan. Because there are two incomes, the chances of repaying a joint home loan are better. A joint home loan also allows you to get a bigger loan because you have more money to pay back. Also, having a woman as a co-applicant helps you get a lower rate on your loan. Most lenders give women a better deal on a home loan.
Tip #4: Try for a Longer Length of Service
Applying for a home loan with a longer-term lowers the monthly EMIs, which lessens the strain on your monthly budget. Lenders prefer home loans with longer terms and smaller monthly payments, making it less likely that the loan will miss payments.
Tip #5: Organize and prepare all documentation
One of the main reasons for a home loan being turned down is not having the correct paperwork. If you don’t have the right paperwork, your home loan could be put on hold or even rejected. So, make sure you check the lender’s website and have all of the documents ready and ready before you start.
Here are the documents that most home loans ask for:
If you work for a company, the list of documents you need is very simple. ID proof, address proof, salary slips, and IT statements from the last few years are all in it. People who work for themselves need to show documents for themselves and their business. People need to show that they have ID and address proof and proof that they own a business. This includes things like GST statements, and IT returns, revenue statements, etc.
Tip #6: Take care of your FOIR
The FOIR (Fixed Obligation to Income Ratio) is another important factor that lenders consider when deciding whether or not to give you a home loan. Figure out your FOIR, which is how much loan you make in total each month compared to how much you owe on all of your loans.
Suppose that you make Rs. 1 lakh a month, and you pay EMIs on several loans totaling Rs. 50,000. This means that you have to pay back Rs. 50,000. So, the number of people you have in your FOIR ratio is 50. A high FOIR of 50 or more will not help you get a home loan. So, before you apply for a home loan, try to close at least two other loans, like a personal loan or a two-wheeler loan, to lower your FOIR ratio.
Tip #7: Choose a well-known property developer
Real estate can be hard to figure out, and lenders prefer borrowers with well-known and reliable property developers. When you choose a well-known property developer, there is a good chance that the project will be done on time and without any legal problems. It’s also common for most lenders to work with the best home builders. Because the lender approves the property developer, you’re more likely to get the home loan approved quickly and without a lot of trouble.
Tip #8: Apply for a Pre-Approved Mortgage
The best way to get your home loan application approved quickly is to get a pre-approved home loan from the bank. Pre-approved home loans are offered based on your ability to pay them back. The amount of money you can get for a home loan is based on the current financial records that the lender has. Most of the time, pre-approved home loans are approved within one or two days after you send in the necessary paperwork.
Tip #9: If you can, pay a bigger down payment
Home loans do not cover 100% of the price of a house. Most of the time, home loans are only available for about 80% to 90% of the property’s value. People have to pay for the rest. This is called the down payment. You are paying a higher down payment than is required increases the lender’s trust, which speeds up getting a home loan.
Tip #10: Select a Lender with whom you enjoy working
You get approved faster if you choose a lender who knows your financial history, like the bank where you keep your pay stub. It’s important to work out any problems that may arise before applying for a home loan, such as an unpaid bill on a credit card. There is a good relationship between you and the lender, so they are more likely to accept your application quickly.