At times, you save for years, do a bit of research and find your dream home and plan to apply for home loan. However, all of a sudden you get an email that your home loan is not approved. Shattering, isn't? Well, just like you there are millions of applicants who apply for home loan however, the application gets rejected because of many reasons like low credit score, high debts, no sound income proof, etc. Getting a loan approved requires years of savings, streamlined payments towards your debt, maintain good credit score, job stability, and income source. Else, its most likely you're deprived of a home loan.
So, expert suggestion a few tips that will help you improve your chances of getting a home loan approved:
Tip No: 1) Willingness to Save
Any lender expects that you should be a regular saver. A strong bank balance will reflect your approach to make savings. So make sure you transfer some funds to the savings account every month as a contribution for the margin money against "House Deposit" in the field. Keep it clean to show the lender how serious you are about buying your new home!
Tip No: 2) Clear Credit Card Debts
When it comes to home loans, a debt can give a hard hit on your loan amount. It indicates your income is getting divided towards the prior debt payments. If your credit score is not so good, then improve it by clearing the payments on time. Keep the score intact for next 6 -7 months before you apply for home loan. A good credit score is a key to get quick loan approval.
Tip No: 3) Pre-Approved Letter
Pre-Approved loans are like a boon to people who want to apply for housing loans. It works as an assurance that you're sincere in payments and capable of affording the loan amount that you've applied for. A pre-approved letter will help you streamline the mortgage process and boost the chance of loan getting approved.
Tip No: 4) Job Stability
In order to get your loan approved, you need to have steady employment or business source. It’s better to run into a successful business for around 3 years else be stable in your job for 2-3 years before you apply for home loan. Too many switches will tend to reject your loan application because they will be concerned about your steady income. And stable job means you have higher chances of getting the loan approved.
Although, technology has helped to apply for loan online right from the cozy corners of your rental homes or offices, however, getting your home loan approved is definitely not a cakewalk. It requires meticulous planning, income and job stability, good credit score and savings towards the margin money costs that you would have to pay upfront when you buy your home.
Also, all these factors will help you to negotiate for low-interest rate deals with the lenders. Hope these 4 tips help you to improve the chance of getting the loan approved. May you soon buy your dream abode!