Deciding to buy a home is a big step, therefore predictions today say that the procurement process to getting a home loan is just as important as choosing a property. In fact, for most people, the decision to buy a property is dependent on the home loan amount that they can qualify for.
Getting a home loan might seem like a difficult and tedious task to go through, but by considering a few tips, you can easily find yourself experiencing a smooth process of getting your home loan approved with no hassles. So, if you happen to be a first-time investor looking to get a home loan for your property of choice, then you can keep reading for more.
Steps To Preparing Your Finances
It’s worth noting that preparing your finances for a home loan should start a minimum of 6 months before the actual application process so you can gain the necessary financial discipline, and have ample time to get your financial status in order.
Clean Up Your Credit Report
Before a loan provider lends you any money, they first check your credit report. Generally speaking, having a score of 650+ is considered a good credit report, so it’s up to you to check your credit information report and credit score regularly. You can do all this online at least 6 months before applying for the loan and this will give you enough time to iron out any problems and, in turn, boost your chances of getting your loan approved.
Pay Off Existing Debt
Always try to pay off any other loans that you may have before applying for a home loan. By having several loans, this may affect your loan eligibility. So, the fewer EMIs you’re paying monthly, the higher the chances of you being eligible for a loan based on your income.
Improve Your Banking Habits
Your bank statement is one of the crucial documents lenders look at when you’re applying for a loan. Through the information presented on your bank statement, lenders can verify your lifestyle, banking habits, repayment behaviors, and if you use your debit card often. So, to qualify for the loan, you need to have a good credit balance each month and ensure that no cheques are bouncing because of insufficient funds.
Get Your Documents Ready
When you apply for a home loan, you will need a salary slip, form 16, and a bank statement. How these should be presented will depend on if you’re a salaried customer, a self-employed professional, or a self-employed businessman or woman. Based on these documents, the lender can provide in-principal approval for your request meaning that the loan will be sanctioned depending on the positive property verification.
Office And Residential Stability
In addition to verifying your income, property, and banking papers, lenders also go through verifying your residential stability and job to avoid risks of fraud or desertions that could take place during the repayment of the loan. If job hopping happens to be your thing, then you may want to hold off on that for at least 6 months as this can affect the status of your application.
Apply For A Pre-Approved Loan
If you plan to buy a property in the next few months, then you can opt to apply for a pre-approved home loan through the bank. These days, a lot of banks sanction loan amounts that can be given to you even before you’ve found the right property. So, in this case, borrowers can go about getting their loans pre-approved to start looking for a home.
Understand The Lender’s Loan Process
When you apply for a loan, there’s a lot of admin that’ll be involved. This means that you’ll be receiving a lot of phone calls, queries, and visitors stepping in on behalf of the bank. Loan providers follow an extensive process that needs them to outsource their verification processes through third-party vendors so all your details can be verified.
However, your loan application is approved or declined, and processed through the lender’s credit department. As soon as you receive a notification that your loan has been approved, a sales officer will take you through the remainder of the process to sort out any other formalities.
This is Rohan, I’m a Digital marketing Expert, Full time Content Writer and founder of BoxerTechnology.com I can help people across the world through my articles. I am sharing the latest stories from companies like Apple, Samsung, Google, and Amazon.