How to improve your chances of home loan approval?

Buying your home is a big step. You’re anxious and tense through the home buying process, trying to understand the locality, commuting, amenities and mainly the price. With the zooming property rates, its nearly difficult to buy your home through your savings over the years. Therefore, you will apply for a home loan. But your loan is one of the biggest liabilities and need to address it carefully. Many times your loan application get rejected if you don't have sufficient knowledge on the subject. So, here are a few tips that will help you better the chances of getting attractive home loan interest rates, and right funding your dream house.

Borrow within your risk potential

While applying for a home loan, check your asset and liabilities. It means your income will be utilized to pay your EMI. The lenders will assess your repayment capacity. If there are too much of financial commitments, chances are they would give lesser loan amount or might reject your application. Your home loan application is approved if you can route around 40% to 50% of your monthly income towards easy installment payments.

Choose a reputed builder

The property that you choose should benefit you and get easy loan approval. When applying for a home loan, you have to provide property papers to the bank or NBFC as a kind of security. So the lenders have to ensure that the property should cover the costs in case you default on repayment. They will investigate the rera authorization, builder reputation, construction, etc. Lenders will investigate if the builder has taken proper permission and approvals from local authorities. Your loan is more likely to be approved if the builder has adhered to strict laws and regulation. You can avail attractive home loan interest rates if the builder has any tie-up with a reputed bank or NBFCs and you fit under the loan bracket.

A stable income source

Your steady income source and savings would be the key factors to assure lenders that you'll be able to repay your housing loans comfortably. Your housing loan application is more likely to approve with a job or business stability of around 2-3 years. It all displays in your ITR and bank account statement. It will determine your income generation, savings, and repayment strength.

Reputed Organisation

If you work in a reputed firm, lenders have trust that you can easily generate your income. This increases your chances of getting home loan approval.  A good position, salary increments, and perks will contribute to your income generation. You can easily qualify for home loans.

Savings

The more savings you can display better are the chances of getting easy home loan approval. You can get a home loan up to 80% to 90% of your market value. So, you have to arrange the remaining 10-20% which would include your stamp duty, registration, property survey charges, and other charges, etc. So, ensure you have done enough savings so that you convince the bank that you will manage the overhead costs.

Get a Co-applicant

Many times individuals alone are unable to display strong income source and find it difficult to get loan approval. However, a co-applicant such as a spouse, parents, can increase your loan approval chances to a great extent. The lender will look at both your income source and compare it with the loan amount and its repayment. If you fall under their eligibility bracket, you're likely to get easy loan approval.

Hope you would follow these six simple tips and improve your chances of getting home loan approval.