Getting an approved Home Loan is a dream come true for many. It helps you buy your own property. However, people who don’t know the exact procedure of the Home Loan application process may go through application rejections. Thus, it is important to understand the detailed procedure and some tips to get approval for a Home or Housing Loan.
One of the key factors to consider is to meet the Home Loan eligibility criteria, which is necessary to get an approved Home Loan. Additionally, you should be prepared for the initial charges, such as the processing fees, that you would need to pay for loan disbursal. Thus, you must take certain measures to improve your Housing Loan eligibility and reduce the loan processing charges.
3 Tips to Improve Your Home Loan Eligibility
Housing Loan eligibility depends on certain factors like your credit score, repayment history, age, employment status, sources of income, loan amount, loan tenure, type and status of property, etc. You must use the Housing Loan Eligibility calculator to identify whether you are eligible for a Home Loan or not.
To improve your Home Loan eligibility, follow these tips:
Maintain a High Credit Score
Your Home Loan approval or rejection is based on your credit score. Maintaining a minimum credit score for home loan of at least 750 or above is important, which can help you secure lower Home Loan interest rates and instant approvals on Home Loan applications. Your credit score can be improved by paying your monthly mortgage payments on time, not missing any scheduled payments, reducing your debt by paying off other loans and maintaining a solid repayment history.
Show Employment Stability and Additional Sources of Incomes
The better your employment or business profile, the stronger your chances of getting instant approval on Home Loans. You must have the potential to display high income and financial prospects, which depict how stable your financial health is and how well you can manage high Home Loan EMIs (Equated Monthly Instalments). This also attracts margin money of interest offered by the loan providers.
Consider a Joint Home Loan Option
Going for a Joint Home Loan can increase your chances of getting an approved Home Loan. The financial institutions check the credibility of both the co-owners before approving the loan. If even one of you meets the eligibility criteria well, you have a higher chance of getting a quick Home Loan approval.
3 Tips to Reduce the Home Loan Processing Fee
Here are the top three ways to reduce your Home Loan processing fees:
Look for Offers and Discounts
The processing fee normally ranges between 0.35% to 7% and depends on the loan amount you have applied for. Several reputed Home Loan providers can either waive off the entire amount or offer you a discount scheme, which reduces the processing fees to half. You must also check for seasonal or occasional discount schemes on home loans in the market.
Establish a Relationship with the Financial Institution
Having all your accounts under one financial institution establishes a positive relationship between you and the provider. They know about your financial health and trust you for your displayed credibility. In such cases, you can negotiate and might get a complete waiver on your Home Loan processing fee.
Reduce the Loan Amount and Loan Tenure
The loan amount is calculated on the processing fees, loan handling or maintenance charges levied by the loan provider. So if you increase the down payment amount to be paid towards your Home Loan and reduce the loan amount, the fees would also be reduced. Reducing the loan amount also decreases your overall Home Loan interest charge and monthly EMI amount. Thus, the more you pay upfront, the lower the amount of other charges on your loan will be.
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Conclusion
Although there are various ways you can adopt to improve your Home Loan eligibility or mitigate Home Loan processing fees and other charges, some of the most important ones are discussed in this guide. Be smart when applying for a Home Loan, and make use of these strategies for a quick loan verification, approval, and disbursal process.
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