By Isabella Rossellinee
Your decision to buy your first property surely is a life altering and a vital decision. You not only need to be prepared financially, you also need to make sure that the conditions are viable for your housing loan application to be processed hassle-free and smoothly. While applying for a housing loan you need to be ready with all your papers and relevant documents. You should get the funds ready so that there is no hitch with the down payment. Your bank would also be putting you through a strict scrutiny process to make sure that lending to you is risk-free. Getting a housing loan could prove to be pretty challenging as every lender would be having his or her own criteria for assessing a loan application. Here are some of the factors that are almost always taken into consideration.
Your disposable income seems to be of vital importance and is regarded as a key parameter for screening your housing loan application. Disposable income is the residual amount left from the gross income after deducting all statutory deductions, existing EMIs, and monthly expenses. In case the disposable income is low and you are applying for a relatively higher loan amount, it is essential to add other working members present in your family, for instance, your spouse or even your kids as the co-applicants.
Tenure of Work & Profession
Your tenure of work & profession is another important parameter. All lenders are interested to find out whether you have a steady income and that too for a relatively extended period of time. If they are satisfied on this count then only you could proceed further. This implies that if you have been switching jobs and cannot produce a year’s income statements or salary slips, your housing loan application may not be considered and would be on hold. Too much job switching is not preferred by the lenders and that leaves a negative impression. PSU and government employees are regarded as safe followed by chartered accountants, doctors, and top private-sector employees.
Lenders prefer the borrowers to be involved in the conventional industries. They are not very confident about the new era entrepreneurial ventures. Lenders stay away from people who are involved in jobs that are fraught with instability and uncertainty. The media professional, those working in the police department and even the lawyers would be finding it difficult to get housing loans. The eligibility terms may differ while sanctioning loans to SME.
Lenders would be evaluating your credit worthiness by going through your credit report and credit score. A low credit score would be automatically ruining your chances of getting a housing loan or you may have to pay a relatively higher interest rate. Different credit bureaus would be having different scoring patterns hence, different yardsticks for identifying a good credit score.
Compliance with Legal Rules & Regulations
Lenders would always be verifying even the slightest details of the property involved in the home loan. They would be providing loans only to those properties which have been legally cleared by all local authorities and enjoy a valid title. Some banks would be offering special loans on properties that have found their way in the list of approved projects in their database.
The Applicant’s Age
Your age would be playing a pivotal role in the housing loan approval process. Though housing loans are known to carry a maximum tenure of thirty years, most banks and financial institutions would want the borrowers to complete repayment when they are about 60 to 70 years old. That is why people in the age group of 25 to 45 years are mostly preferred so that there are around 20 years of work life still left for paying off the loans.
Mostly public sector banks seem to be most stringent during the housing loan approval process. However, their interest rate is also supposed to be the lowest. The NBFCs are willing to entertain your loan requests even if the biggest banks have refused to finance your home buying project. Most of the factors considered for home loan sanction are all relating to you. So take care of those factors if you do not wish to encounter loan refusal. Moreover, make sure that your property has all the compulsory clearances before taking the final plunge.
Author Bio: Isabella Rossellinee is a home loan consultant and a blogger. Her blogs are related to efficient wealth management, debts, loans and how to avoid bankruptcy.She advises and helps people in sorting out their financial mess and also shares valuable resources like https://magma.co.in/ from time to time.
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