What Do Lender Need for Home Loan Approval?
With the decline in the interest rates offered by the banks and other lending institutions, there is high demand for home loans in the Indian market during recent times. Government subsidy on the interest rates is making it a tempting offer for many. People are looking to purchase a new home with the help of housing loan and increase their asset value. Many borrowers who have good credit score and stable job in a multinational company think that their home loan processing would be a swift one. To your surprise, few reasons like regulatory compliance of the builder may not fit the requirements of the lender and home loan application may be rejected or delayed. Check in all the mandate information that the lender’s look in while proceeding ahead with the home loan application.
Many people are under the presumption that high income will increase the chances of housing loan approval. It is your disposal income that plays a key role in the housing loan approval and the amount that can be sanctioned. What is this disposable income? The lender’s take your repayment capability into consideration after making all standard deductions, your expenses, existing EMIs from your gross income. You will gain a good chance of housing finance approval when your disposable income is high. This income also decides the loan amount that can be sanctioned. If there is any shortfall between the lender’s approval and your expectation, consider adding working members of the family as co- applicants.
Credit score above 770 points is considered as a good one to apply for the housing finance by most of the lenders. When your score is below this, try to improve it before you apply for the home loan. Never apply with the multiple lenders with the misconception to increase the chances of house loan approval, rejections from these lenders will low your credit score further.
Many people will never look at their age while applying for housing loan but, this is one of the key factors that decides your house loan approval. Lenders consider earning capacity of the borrower is limited to retirement age so, they consider sanctioning the loan accordingly. There are higher chances of loan approval if your age falls between 20-45, otherwise, you have to rope in earning of co-applicants like your spouse and children to increase the chances of home loan approval.
Independent verification is conducted by the lenders before the home loan is approved. The property you have chosen to purchase should have a clear title and must have a clearance from the local authorities. You can get a special loan package if the builder you have chosen is listed in the database of the lender you are approaching.
Job security and stability
Lenders may not consider your profile for a home loan positive if it does not guarantee job security and stability. Real estate brokers are one such example. They also will look at your continuity with the current employer to know your stable nature before applying for a loan.