Home loan approval can take time given the complications involved in getting the loan amount sanctioned by the lender. Firstly, the property you wish to buy needs to be authentic. Lenders evaluate its authenticity by executing property verification legally and technically. Any foul play found by officers while verifying could lead to an outright rejection of a home loan application. Besides, these officers could peg the property value lower than you may estimate, resulting in a loan amount not enough to buy a home. Your already existing loan obligations may also prompt lenders to reconsider approving your case. But while these may pose challenges to your dream home acquisition, there are ways by which approval can happen instantly. Let’s check out the same.
Check Out the Home Loan Application Approval Tips
There’s no harm in doing the research before finalizing the property you should buy on a home loan. Of course, one has to keep in mind a certain budget when buying a property. But what if the lender denies you a loan purely on the grounds of property? The house may look impressive, but is it on the approved list of lenders? If not, choose from the approved list that comes within your budget too. Being smart while doing financial planning for a home would only help you buy it faster. With explanations on these important aspects, you could buy your dream home quickly. Let’s begin discussing these.
Do a Thorough Research of the Property
As told earlier, the property needs to be on the approved list of lenders who make the same based on authorization, history of real estate deals made in locations. This is done to prevent fraudulent real estate transactions that often put buyers in a tight corner. You can visit the nearest branch of the lender to get the list or find it online. With the list, the property selection gets better and so heightens the chances of home loan application approval.
Research on the Property Documents
One needs to submit a list of property documents such as the agreement of sale, down payment receipt, property map & chain, encumbrance certificate, etc. Of this, the property map and chain will be under intense scrutiny by the legal and technical verification officers. The map will help officers authenticate the construction of the property in line with the same. In case of any deviation, home loan application approval can delay. The lender may even reject your application if the officers report badly on the same.
Even bigger is the role of the property chain, which shows a series of property owners before you. This greatly determines the legality of the real estate transaction. Sometimes a house may allegedly be under the ownership of more than one individual, leading to long courtroom battles and the hassles that come with the same. This problem can be averted long before if you ask for the property chain from the seller and read about different owners. In case you can’t understand the technicalities associated with the same, consult legal experts for help.
Extend the Home Loan Tenure
Extending the home loan tenure can also help you meet the eligibility norms set by the lenders. The Equated Monthly Installment (EMI) can become too high for you to pay in case the loan tenure is short. You can thus extend the tenure, which can be a maximum of 30 years, to reduce the EMI and meet the eligibility norms.
No Harm in Paying More Upfront
You would do well to know that a home is not financed wholly. Lenders disburse around 75-90% of the property value. It only implies upfront payment to the tune of 10-25% to the property seller. In case you’ve saved more than the required upfront amount, pay the extra to reduce the home loan outstanding balance. The reduced balance will help you pay the EMI on time and make lenders tick your home loan application. This ploy could also come in handy in case the property verification officers peg the property value below your estimate. So, the extra amount accumulated would help cover the shortfall arising in that case.
Fixed Obligation to Income Ratio (FOIR) is THE tool that allows lenders to calculate your home loan eligibility. In other words, you can call it EMI/NMI ratio. NMI refers to the Net Monthly Income. Ideally, the home loan EMI and any other existing loan/credit card obligations should not go beyond 30-50% of your NMI.
Mull Joint Home Loan to Meet EMI Requirements
Sometimes even after applying so many hacks, the EMI gets out of our hands. In that case, a joint home loan with another earning applicant can do it for you! Here, the EMI payment burden will be shared between you and the co-applicant. You can take this loan along with any of your earning spouse, father, mother, son, daughter, brother or sister.