4 Ways to Ensure the Approval of a Home Loan Application
India’s real estate sector is predicted to reach a market size of Rs.7,18,000 crore. To meet the increasing demand for residential property, a total of 19,600 new units have been constructed to provide affordable housing in and around metropolitan cities across India. This has prompted more and more people to avail home loans.
Several Indian financial institutions offer housing loans on the basis of some essential eligibility requirements and at affordable interest rates. However, these applications involve extensive research and decision-making. One should have knowledge about the reasons for home loan rejection to ensure a successful application process. This saves a lot of time and effort for approval.
Take care of the following to avoid rejection of your home loan-
Credit Score
Lenders avoid the approval of housing loans for applicants with a low credit score. A high CIBIL score is a pre-requisite for the approval of the home loan. Thereby, you are required to maintain your credit score as it indicates how good you are with your investments and much new loan you can repay.
A clean financial record is imperative to maintain a good credit score. A score of 750 is considered to be ideal for availing the loan. In order to attain that score make sure your credit card bills are not left unpaid and all your outstanding debts are paid off. Your credit score can also get affected if there’s multiple submission of the loan application. Therefore follow the tips to enjoy the approval of the advances without any hassle.
Financial Condition
Credit history is one of the foremost things to determine your housing loan. The lenders calculate your real income after subtracting the liabilities from your income. Go through the following housing loan eligibility criteria to avoid rejection –
- Be aware of your bills and repayment dues by keeping a check on your credit record.
- Timely payment of unpaid dues.
- Never miss deadlines on EMIs.
- Make sure your EMI does not occupy a substantial portion of your income.
You can compare the interest rates and calculate EMI to be eligible for the loan. Maintaining these measures will boost your eligibility for a home loan.
Filing Income Tax Returns
Lenders may ask for your financial records including filed Income Tax returns of the last 2 years to process your application. The return document helps the financial institutions to assess the level of income of salaried individuals.
To ensure the lender that you have a steady source of income and would be able to repay the EMIs, your tax returns should reflect stable, preferably increasing income over the years. It is imperative therefore to file your ITR on time. You can also use an Income Tax Calculator online for further assistance.Failure to do so will lead to dismissal of your home loan application.
Application Form and Documents
Any form of inconsistency in the application form will surely lead to rejection of your application. Strictly prevent mistakes related to salary details and account numbers.
Following are the documents required for a home loan –
- KYC details
- Address Proof
- Identity proof
- Form 16 or the latest salary slips
- Financial account statements for the previous 6 months
- 5 years of work experience proof for business
For salaried individuals, 3-year work experience document proof.The above-mentioned points should be considered for the instant approval of your loan. In order to secure your desired home loan application, you can also provide additional details such as fixed deposits, collateral securities, insurance policies or a guarantor.