Tricks to get your Home loan approved

We all wish to have our own house someday, and start saving for it from the day we start earning. With rising property prices, not many people can save enough to buy a house at an early age. Home loans provide the financial support needed to purchase the dream home of your choice. But before a home loan is approved by the bank, the borrower is evaluated on several factors to establish his credit worthiness. For example income level, credit history, employment details, current liabilities are some core factors that form a part of axis bank home loan appraisal process.

Here are some tricks that you can follow to ensure that your home loan application gets approved.

  1. Maintain a healthy credit score-Your CIBIL Score is the most important thing that the banks consider to make a judgement about your creditworthiness. Make sure that you have a healthy credit profile. Make on time payments on your previous loans and credit card bills. Keep your credit card outstanding balances low. Do not apply for new credit cards or other kinds of loans 6 months prior to applying for a home loan. Such good credit habits will help improve your score and increase your chances of home loan approval. Though there are lenders who offer loans for low CIBIL score , one should avoid such options as they are available at a very high rate of interest. Home loan is a long term liability. Even a 0.5% difference of interest rate over a period of 20 years translates into a huge amount. So it is always advisable to work on your score before you apply for a home loan.

  1. Stable employment ā€“ Banks look for stability in the job of the applicant. An applicant who switches job too often or has recently changed his job is not preferred by the financial institutions. So if you are looking to change job, you may defer your plans till your home loan gets approved.

  1. Buy the right property– Banks follow a conservative approach and offer loans for only those properties that have a clear title and good resale value. So even if you are an eligible borrower, your application may get rejected if the property is involved in a legal battle. Before you decide to buy a property, ensure that the land title is clear and the builder is a reputed one.

  1. Go for a longer loan tenure ā€“ If the bank thinks that your current income will not be able to support the monthly EMI, and rejects the application for the amount of loan that you require, you can opt for a longer tenure. A longer tenure will reduce the EMI amount and make you eligible for the loan.

  1. Pay down previous debts- Your debt to income ratio is evaluated by the bank to determine whether you can easily afford the home loan EMIs. If you have an existing loan that is about to finish, it is better to arrange for some finances and pay off the loan. This will reduce your regular monthly commitments and free up your income that is available to service the home loan EMI. As your debt to income ratio improves so will your eligibility for a higher amount of home loan.

If you do not have sufficient funds to prepay the other loans, you may increase the tenure of those loans, to reduce the EMI amount on them, and free up your income for the home loan EMI.

  1. Ask your parents or spouse to sign as a co-applicant ā€“ With an additional co-applicant, the income that can support the home loan EMI increases thus increasing the eligibility for a higher amount. You can also benefit from the good credit history of the co-applicant.

Apart from this, you must keep all the required documents ready. Bank statements, IT returns or salary slips are some important documents that help a bank in establishing your repayment capacity. Show sufficient proof of your ability to pay the EMI. Use the tricks mentioned above and you will surely get approved for a home loan to finance your dream house.

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