Points to remember while buying a home loan

Points to remember while buying a home loan

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While you are all excited to buy a new home and paint it in your favourite shade, get the best furniture, decorate it the way you always wanted, somehow the excitement is not same for a home loan. It is because the process looks lengthy and confusing. Till some years back, the whole process of applying for a home loan was even more daunting as you had to physically visit the bank with all the documents to initiate the process. Now, this has been made significantly simpler with the online application being a part of avenues offered by online banking.

Today all those procedures such as paying EMIs, submitting loan application form and documents, and finding the offers from various banks and institutes has been made easy with the online application of home loans. For which, you need to go to the official website of the lender. Not just that, but also the difficult tasks such as comparing the offering from different lenders and calculating EMI for your applied loan amount can be done easily with online loan comparing websites and home loan EMI calculators. All you need to get the best deal is little patience and better planning.

Here are some dos and don’ts to follow while you apply for a home loan

  • While you plan to file for a home loan, you need to make sure that you are financially stable. For this, you need to record your credit and savings paperwork. It will make your home loan buying process easy.
  • Make sure you pay all your EMIs and other bills on time up till 6-8 months before applying for a home loan. It will increase your credit score and make the approval process easy.
  • In case you miss any payments or make late payments of bill due to some reason, then keep your supporting documents ready. It will buy you some time for credit appraisal of advances.
  • Try not to make any significant purchases needing a huge amount such as home appliances, gadgets or car on instalments. It will negatively affect your credit score.
  • Do not make a mistake of considering Rate of Interest (ROI) the only cost of credit you must bear. Along with the EMIs, you must bear other expenses such as stamp duty, pre-payment charges, registration fees, and processing and conversion fee.
  • To get your loan application approved easily, you need to prove that you have a higher repaying capability. To do this, you can add your earning family member’s name and income as co-applicant to show more revenue and increase loan eligibility. Moreover, you can also include other sources of income even if it is irregular.
  • While buying a property, it is crucial to check whether the property you are buying clarifies all legal and technical requirements. Like in the case of resale property, the title of the property should be clear, and you should have all the transfer documents in the record. If the property is under construction, then you need to have the agreement and an approved plan of the property.
Read more: How Does a Home Loan EMI Calculator Work

While you keep a check of various factors, do not forget the most vital factors affecting the approval of home loan are your credit score and repayment capability. You can check your credit score on online credit score calculator and loan repayment capacity with home loan EMI calculator.

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