Applying for Home Loan? Keep these things in mind, you will be in profit

How to Apply for Home Loan: It is everyone’s dream to have their own house. If you do not have enough money to buy a home, then with the help of a home loan, you can fulfill your dream. Banks or non-banking finance companies can give you long term loans. In return, you pay a fixed amount in the form of monthly installments to the bank or NBFC for a specified period (10, 20 or 30 years), in which you repay the principal amount and interest of the loan. This is home loan. Extreme care should be taken while applying for home loan. Banks refuse to give home loans due to many reasons. Today we are going to tell you some such tips by adopting which you can easily take a home loan.

Know loan offers

  • Keep complete information about loan offers from time to time from banks.
  • Do not take loan in haste. Explore and compare loan schemes of various banks first. Then apply.

Keep in mind the CIBIL score

  • CIBIL Score shows your credit history. It plays an important role in getting you a loan.
  • Through this, banks see whether you have taken a loan before or how you have used credit cards etc.
  • Credit score shows repayment history, credit utilization ratio, existing loans and timely payment of bills.
  • The credit score is in the range of 300-900. A score of 750 or more is considered good.
  • That is why it is important that you make your credit score good. For this, make a habit of paying the loan or any other EMI and credit card dues before the stipulated time.
  • Check your credit score regularly so that you can improve it in time.
  • If you have a good loan repayment record, then understand that your CIBIL score will be equally good.
  • Do not take more than one loan at a time as it affects your credit.

You can apply for Combined Home Loan

  • If home loan is not available then joint home loan is a good option.
  • Taking a joint home loan reduces the risk of the lending institution.
  • Make someone you know as a co-applicant who has a stable income and a good credit score.
  • Adding a co-applicant increases the chances of getting a loan.
  • On taking a joint home loan, both the applicants will be able to take advantage of income tax deduction.

Apply for less amount

  • If you want to buy a home, then keep the loan-to-value (LTV) ratio low i.e. you will have more contribution to buy a house.
  • This reduces the risk of the bank and increases the chances of getting the loan.
  • Lower EMI due to lower LTV ratio increases the loan affordability.

Which bank to apply

  • You should apply for a loan in the bank where you have an account or FD.
  • Doing this increases your chances of getting a loan.

Keep in mind the fixed obligation to income ratio

  • The Fixed Obligation to Income Ratio (FOIR) shows how much loan installment you can pay every month.
  • Banks definitely see the FOIR while giving loan.
  • This shows what percentage of your existing EMI, house rent, insurance policy and other payments are your current income.
  • If the bank takes all these expenses up to 50% of your salary, then the home loan application may be rejected.

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