Owning a home is one of the most significant dreams for most of the people and they wish to build a house for their family. For most of the people, having a home is a long term asset which they wish to leave behind for their upcoming generations. Therefore, to make home purchase achievable in the skyrocketing property prices, lenders have proposed the concept of home loans.

One can “Apply For Home Loan“ to get instant access to affordable financing to purchase their dream home. Similar to other loans, home loans also have certain guidelines as the process of home loan is regulated by RBI and National Housing Board. In this article, we have outlined some of the guidelines that are followed by the lending institutions while sanctioning you a home loan:

✓ Valuation of the loan: The loan amount offered by the lending institution depends upon the loan to value ratio which is evaluated on the basis of borrower’s eligibility as well as the market price of the property to be pledged as collateral. A lender will sanction the funds up to certain limit like 80-90% of the total value which excludes stamp duty, registration charges as well as other expenses.

✓ Pre-payment charges: As all know, Home Loans are generally high value loans which borrowers choose to repay in 20-25 years duration. However, if anyone chose to settle or pre-pay the loan amount earlier then a penalty of 2-4% is levied. According to new guidelines, RBI has made the Home Loan terms more flexible and favorable for borrowers by waiving the penalty charges.

It is applicable for the Home loans availed on a floating rate of interest and taken for non-business utilization.

✓ Eligibility and Documentation: Every lender need to ensure while lending money that all the submitted documents by the borrower are in order with the statutory requirements. Moreover, home loan applications shall be accepted of the customers who meet the eligibility criteria which involves a regular income, efficient repayment capability and a god credit score above 750.

This all can be verified with the help of documents. Keep in mind that eligibility criteria and documentation can be different from one lender to other.

✓ Flexibility to switch: In case, you have availed the home loan when the rate of interest was so high and now other lender is offering you to transfer your outstanding loan balance at better rates of interest, you have an option to foreclose the loan with penalty and switch your existing loan with the new lender at low rates of interest. However, this benefit can be enjoyed for the borrowers who have taken up the floating rates of interest.

Well, in the times of inflation, we all would not have sufficient funds to fulfill our needs but the lending sector has made some major dreams possible through their loan solutions these days. Thus don’t feel restricted to buy your dream home now as you can “Apply For Home Loan Online“ or offline to enjoy your comfortable space with your family and beloved ones.

Nowadays, one of the easier methods of financing a home purchase is availing a home loan but sometimes your loan application gets declined. These reasons can be as simple as not meeting the basic eligibility proposed by the lender or some of the documentation errors in your KYC details as well as property title.

In this article, we will discuss some of the significant reasons of the rejection at the time you “Apply For Home Loan“. We will guide you through these points that keeping these factors in your mind while availing a loan can lower or nil the rejection of your application.

● Low credit score: Every lender prefers to sanction the loan to its customers who are having a credit score above than 750 as it reflects your capability of repaying the loan and lowers the risk of default. However, if you credit score is poor then try to improve your credit score before getting a home loan to avoid rejection and to negotiate on better terms of loan.

● Age of borrower: Generally, home loan is a long term with repayment period going up to 25-30 years. In case, if you are applying for home loan near to your retirement age, then the chances of rejection are higher. If anyhow you get approval on your loan application, then you have to pay the higher down payment and you have to provide some additional guarantees such as younger co-applicant.

● Insufficient paperwork: Improper documentation can be one of the main reasons behind the rejection of your home loan. If you fail to provide any single document asked by the lender, it can impact the entire loan approval procedure. Therefore, it is good to checklist all the required documents before getting a loan to avoid any troubles through loan procedure.

● Unstable job: Your job stability is the crucial factor consider by every lender as it indicates the regular cash flow to repay your loan within the stipulated time. However, frequent job hopping can impact your home loan eligibility adversely and reflects the sense of uncertainty about your credit-worthiness in the lender’s mind.

● High debt to income ratio: A high debt to income ratio of borrower indicates that a larger part of your income is utilized in servicing existing loans or other expenses. So, prior to loan application, one must ensure himself/herself as well as lender that they have low debt to income ratio. You must be aware of the thing that your loan EMIs should not cross the 50% of your monthly income.

● Unauthorized property: The loan application doesn’t depend upon only meeting the eligibility criteria but it is also based upon the paperwork regarding property to be purchased. It is advisable to check the every aspect of property to make sure that the property is free from legal issues and should meet all the guidelines of local authority.

Hence, it is good to ensure yourself that you fulfill all the guidelines and eligibility criteria of loan then “Apply For Home Loan Online“ or offline to ensure smooth home buying experience.

One will be surprised to know that he/she can get a financial security along with “Home Loan“ because there are so many ways to save funds on it. The great thing about a home loan is that it can help you save on your monthly repayments. Therefore, one can save a lot on their home reading all the terms and conditions.

A great way to save money on home loan is to avail the most economical loan possible and then repay it off as earlier as possible. In this way, you can save money on interest rate while you are paying monthly installments on the principal amount that are smaller than charged for other mortgages.

A borrower should check and compare all the loan features with different lenders before you “Apply For Home Loan“ to get a best deal out of all. In this blog post, we have listed some of the easiest ways to save funds on your home loan:

Negotiate with lender: When you request a lower rate of interest on your home loan with a specific lender is known as negotiating and its rate depend upon your relationship with the lender. It is important to maintain a good financial relation with lender because if you are a good customer then it would be costly for a lender to lose you.

So, always request a negotiation if you are getting a better deal with other lender. Negotiation helps you to get lower interest rate and better terms if done properly. It would make you able to save more by using your skills efficiently.

Make a large down payment: The clever way to save funds on home loan is to pay large down payment so that you avail only necessary amount which will reduce your interest outgo on principal amount. It is always convenient to make large size down payment instead of taking an additional amount.

It is advisable to keep some part of funds as an emergency fund in case of exigencies. Hence, keep check on both these points and evaluate how much money you can spare for down payment.

Do thorough research: It may be an under-rated step that can help you save a lot of bucks on your home loan. One should do a thorough research on all the available deals and also compare the various rates that are being levied by different lenders. You can check on various lenders at different lending platforms, what they are offering and what you are getting into.

One can also research at regular intervals to know what kind of interest rate changes are happening in lending market and what you are giving in comparison of that.

Increase your EMI: Home loans always have longer tenure so you can increase your monthly installments with increase in your earnings. It will reduce the tenure on your loan as well as interest outgo on home loan. Always keep in mind that increased income would lead to increased expenses therefore, you would be required to account for increased living costs too.

Hence, these are some of the methods which you can follow to save funds on your home loan. One can “Apply For Home Loan Online“ with ShubhBank offering competitive interest rates with no hidden charges and experience best-in-class services.