Top 5 Ways To Optimize Your Chances of A Home Loan Approval
A home loan could be taken to buy a home, renovate a home or add extensions to a home. The question boils down to this: why would someone seek a home loan?
The most cited reason is a shortage of funds. A home loan is a great option to overcome a lack of funds to buy or renovate a home. Whatever the reason, it will be to any applicant’s advantage to know what is necessary for quick loan approval.
Show Additional Income
What is your annual income? A high income is a big plus point to apply for home loan finance. If it is not up to the requirement cited, you can also show any additional income you may have. (let see Apply for NFO Online)
High income also means higher loan amounts. The higher the income, the higher are chances that the loan will be paid within the chosen tenure. The bank will not hesitate in approving the home loan right away at competitive home loan rates.
Good CIBIL Score
The CIBIL score is another determinant that helps fast approval of home loan finance. The CIBIL score indicates the borrower’s credit history and whether he had defaulted on previous loans. It mirrors the borrower’s creditworthiness.
Therefore, it is a given that all lending banks will check CIBIL scores before approving a home loan.
The three-digit CIBIL score ranges from 300 to 900. A score of 700-900 speeds up the loan approval. It also guarantees the best prevailing home loan rates. CIBIL score increases when EMI and credit card bills are paid promptly.
Have Co-Applicants
Not everybody has a high CIBIL score, and therefore not everybody is eligible for home loan finance.
Creditworthiness is an important factor. Check if a close relative has a high CIBIL. A spouse, brother, sister, son, or daughter with good repayment records and good creditworthiness, can become co-applicants. The applicant’s creditworthiness will increase, making them eligible for the home loan. Quick disbursal is guaranteed.
Loyalty with the Bank Matters
Has the customer been loyal to the bank? Do they share a great rapport with the bank? The loyalty factor counts when applying for a home loan. It works to the advantage of the applicants if they have a record of loyalty to lending entities, best exemplified by their repayment histories.
Applicants who never default on loans or credit card bills payments are counted among trusted customers and are eligible for quick home loans at competitive home loan rates.
Furnish Necessary Documents
Home loan approvals will be easy and fast if all the documents are available to apply for the loan online. If you don’t have all the documents ready, you can take some time and get them made. Here’s a list of all documents that may be required:
- Address proof
- Identity proof
- Business proofs
- Property proof
- Possession/Allotment letter
- Chain title documents
- Draft sale deed
- NOC from building society
Income Proof
Salaried applicants should have the following papers:
- Last ITR
- Form 16
- Salary slips of the previous 2 months, or
- Bank statements of the previous 6 months
Non-salaried should have the following papers:
- A P&L statement or the balance sheet
- Bank statements for the last 6 months
- Credit card statements, or
- The latest ITR/GST returns
Conclusion
A home loan can make your dream to own a house come true. It is recommended that you apply for a home loan only when you have considered the factors that influence your eligibility for a home loan. It will also cut short the time your home loan application takes to get approved.
Getting approval for a home loan can be difficult, especially if you don’t know what exactly the lender may be looking for. It might be a long process even when an applicant has all the necessary documents in hand. Factors such as creditworthiness based on CIBIL score, having co-applicants can help smoothen the process. They help ensure that your application for home loan finance stands a better chance to get approval.
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