Home Loan

5 Things You Shouldn’t Do While Applying For a Home Loan

Home loans are the most popular option for prospective home buyers these days. With the number of working, middle-class population increasing ever so quickly in India, the number of ambitious individuals looking for new, swanky homes has also risen.

But these swanky homes come at a price, which the working individuals tackle with the help of a home loan. While banks approve a majority of the loan applications, they also routinely reject certain others for various reasons, some even silly ones, which can be easily avoided.

So, if you are entertaining the idea of buying a new home with a loan, here are 5 mistakes you should avoid at all costs. Because if you commit these mistakes, there’s a definite chance your home buying dream will plummet down even before it takes off.

What are these mistakes? Read on to find out.

Job Hopping – A Big No, No!

This might seem like a rather innocuous thing you shouldn’t be doing. But believe us, this matters a lot to the banks that provide you a loan. Usually, when you apply for a loan, banks vet your employment history to determine your career path.

If they even slightly feel that you’ve been changing jobs frequently, you can forget getting a home loan. This is because banks expect their applicants to maintain a steady employment course, which makes you trustworthy for the repayment of the loan you’re seeking.

Closing an Old Credit

You most certainly have heard of the impact a good or a bad credit score can have on your loan application. But what you probably didn’t know is a good one too can sometimes can have a negative impact.

Don’t get it? Here’s how? Imagine you have an old credit card with considerable debt hanging over it. Just before you were applying for a loan, you decided to close it. What happens after is that the banks won’t get to see how timely and prompt you’ve been while repaying the debt.

So, if you’ve have a debt and a good repayment track to go with it, make sure to hold that out as it improves your CIBIL scores. The longer the history, the better the credit score.

Taking A New Loan

A lot of people seem to do this, nowadays. You might think this wouldn’t affect your chances of getting a home loan much but in reality this can make or break the fate of your application. Consider you’re going to take a loan for INR 30 lakh for which the EMIs would come up to INR 30,000.

Now, if you have an outstanding personal loan of say INR 5 lakh that will also takes out a tiny chunk of your salary. You’d be repaying two loans while also maintaining your household expenses, which can get a little too hard to handle. Banks usually take your other monetary obligations into consideration too, so going for such a move could spoil your chances.

Lack of Research

It’s very easy these days to get excited about all the enticing offers available in the loan market. But you should do a fair bit of research to find out if those offers are suitable for you. If you don’t carefully research your options you’d end up with a loan you’d regret in the future. To avoid such an outcome, do your own research, since this will help you get the perfect loan deal you’re looking for.

You should also make sure that the house you’re planning to buy comes with no legal issues.

Overleveraging a Loan

Banks are always there to lend you money. They even offer you a loan deal for a higher amount when you don’t even require one. So, before you apply for a home loan, decide on the exact amount you’ll need and check whether you can maintain a steady lifestyle with your income while paying the loan. Also, check whether you can make do with a much lower amount. If you can, it’ll save you the burden of paying more interests.

If you keep these 5 things in mind, you can rest assured that your home loan shopping will be a simple and hassle-free affair.

Source: http://loanwalle.com/blog/5-things-you-shouldnt-do-while-applying-for-a-home-loan/

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