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Key tips to consider before getting home loan

Key tips to consider before getting home loan

Key tips to consider before getting home loan
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By CNBCTV18.com Contributor Jan 13, 2022 4:33:52 PM IST (Updated)

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Here are six suggestions to follow in order to ensure a smooth house loan approval

Our personalities are imprinted in our homes. It's a legacy that's passed down through the generations. As a result, a home is one of the most essential investments a person can make. But they are unquestionably expensive, and they are rarely acquired all at once. As a result, having easy access to credit becomes critical in the home-buying process.

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Here are six suggestions to follow in order to ensure a smooth house loan approval:
Credit where credit is due
In the age-old saga of human finances and credit accessibility, many times the latter has trumped the former in the game of flipping hourglasses. It is very important to understand that one should never be presumptuous in their claims for credit. Maintaining a good credit score and being aware of your score is always very important. If you follow this very basic but golden rule, the assent for your loan will be sanctioned without any issues.
There’s no right time, but there is always a right merchant and the right property
Waiting for the right time in relation to the dynamics of market statistics can be a wrong step. One needs to remember that property prices don’t fluctuate easily. Trying to expedite this process by rushing in whenever the prices fall a bit can be a costly mistake in the long run. The best tip in this regard is to evaluate your financial situation and find the right merchant for your needs. There are some trailblazing fintech brands that are highly dedicated to accelerating home ownership in the affordable segment in India by providing easy-to-access and cost-effective home loans.
One of the foremost segments of buying a home is finding a property that is approved as per general banking norms. The property you’re looking to purchase should be approved by the development authority in the city where you reside. After the evaluation, the next step is to check the title flow of the property, for which a title search certificate is a necessity.
Ingressing into the deal with the right interest rate and with own contribution towards the purchase
A home loan seeker needs to pick the right interest rate for the repayment. Fixed and floating rates can both have their advantages and disadvantages. If you’re staid in demeanor and don’t want to indulge in the adventures of the market, you should opt for a fixed rate home loan while the rates are comparatively lower. If you’re willing to trust the market and its ever shifting metrics, go for the floating rate, as in the long run, the rate of interest counterbalances the crests and troughs of the market.
Every buyer of property needs to provide their Own Contribution Receipts (OCR) that are issued by the builder or seller. It is the margin of the money paid by the purchaser out of their own pocket. It is generally 20–30% of the total property value.
Dispense off the delayed dues and check eligibility
Your Credit Information Bureau (India) Limited (CIBIL) score, the approval of your loan, and clearing off your existing debts form an equilateral triangle; they are all equal factors in the home-buying process. A higher credit score before requesting a home loan can be the difference between getting it sanctioned or getting rejected. It is also very important to check your eligibility for a home loan before-hand after choosing the right property and the right lender.
Joint loans can be an advantage
A borrower might apply for a loan with a co-applicant to boost their EMI repayment capacity. Lenders view a shared house loan as a low-risk investment and, as a result, approve it with favorable terms.
Keep the documents ready
It is always handy to have your documents and checklists ready in advance for a smooth process. A salaried individual should be able to produce bank statements from the last 6 months, the latest form 16, and salary slips. Whereas a self-employed person would be required to show past 12 months' bank statements, an ITR from the past 2 years, and business proof.
The author, Milind Gowardhan, is MD and CEO at LEAF Fintech. The views expressed are personal
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