How to Increase The Chances of Your Home Loan Approval
Interest rate for home loans is always on a high. The economy is balancing itself on the edge and we might be just a push away from entering a global crisis. As bad debts are on a rise, banks are highly sceptical about lending money to anyone which involves even an ounce of risk. As the chances of your loan getting disapproved increases, the situation might not be that bad as it looks. As the decision to approve your loan purely rests in the hands of a lending institution, there are certain things you can take care of to improve you chance of getting your loan dispersed.
Build your reserves
The decision to buy a house should be done after proper planning. Start planning 2-3 years before you decide to buy a house and start saving a fixed amount to strengthen your reserves. Banks and financial bodies such as PNBHFL, DHFL, etc. generally offer loans for 75-85 % of the value of the home if you have necessary documents required for home loan. However, it is always better to pay as much as possible from your side. This helps in reducing the EMI you have to pay, reduces the interest rates, and also increases the chances of your loan getting approved.
In case you stretch the limits of your income with the home loan, there are high chances that the bank would refuse to approve it. There is always an option of you getting a co-borrower for your loan. In this case the liability of the loan is being shared with someone and at the same time his or her income is also considered while calculating the repaying power.
Pay off your credit cards bills
Every outstanding amount in your credit card is closely surveyed by credit bureaus like Cibil and Experian. Credit cards outstanding are considered as unsecured loans and have an adverse effect on your credit history if the bills are not cleared from time to time. Make sure that you are clearing your credit card outstanding some months before you apply for your loan so that the report reflects correct data.