Applying for a home mortgage loan can be one of the best decisions you have ever taken. It shows that you are one of those ambitious persons who can go to any extent to fulfil their dreams or aspirations.
However, a home mortgage loan often puts a borrower under a significant financial obligation. If they do not plan the repayments in advance, the consequences might be dangerous.
Lenders analyses a borrower’s profile carefully, primarily to evaluate the risks associated with the loan, before approving the loan.
If you want to increase the chances of home loan approval and avail it at lowest mortgage interest rate, read the top-6 tips contained in this article.
Top-6 Tips to Secure Home Mortgage Loan Approval
1. Monitor the Credit Score and Try to Keep It High
Novice borrowers often fail to understand the importance of the credit score. It is one of the most vital factors that decide mortgage loan approval and interest rate. The credit score is a crucial figure that demonstrates your financial credibility. People who pay loan or card dues in time have a high credit score. Hence, before applying for a mortgage loan, you must check your credit score and improve it if required.
2. Prove That Your Income is Stable
Your mortgage loan approval prospects can be bright when you demonstrate an impeccable service record and a decent monthly income. People with a stable income often get more leverage than those who do not have a stable income. Lenders want this assurance because they want to check whether you can pay the EMIs on time or not. Hence, before applying for a mortgage loan, try to gather evidence of your income source.
3. Stay Away from Multiple Loans
If you plan to avail of a mortgage loan, it is better to shy away from other loans. A loan against property is an all-in-one loan. You can use the funds for any purpose. Hence, try not to apply for other loans while applying for a mortgage loan since multiple loan applications may bring your credit score down and make approvals difficult. Also, try to settle existing debt before accumulating new debt.
4. Apply for an Affordable Loan Amount
The mortgage loan amount generally depends on the property value. Generally, you can apply for a loan amount of up to 60% of the property value. However, the EMIs are a long-term liability, and you need to provision for them. If you feel that the EMI amount will be a burden, consider reducing the loan amount. A lower loan amount can decrease the EMI considerably.
5. Save More
Occasionally, the lender might look at your bank account statement to evaluate your spending habits. This especially applies to people in the low-income bracket. Irrespective of your income level, it is always wise to save the money beforehand than worrying about the repayments later. It can send a strong signal to your lender that you are a serious borrower.
6. Arrange the Documents
Mortgage loans are document-intensive loans. Since these loans are secured, you need to prove that your repayment capability is beyond any doubt. Your lender might ask you to furnish several documents, such as income proof, Income Tax Returns, age and address proof, processing fee cheque, and original property documents. Keeping these in order can guarantee quick loan approval.
A home mortgage loan may open a window of opportunities if you are serious about loan repayments. You can turn the odds in your favor by keeping these tips in mind.