Home Loan – Obtaining a home loan in India is a difficult task, as it is a large debt. Owning a home involves a great deal of money, long-term planning, and vision. Most people try to buy a house with a bank loan. Banks take into account a variety of financial aspects of the applicant when granting a home loan, and two people with the same credit score may get different results on their home loan applications. Now what are the important things that banks consider before approving a home loan Let’s find out.
What do Banks check before giving a home loan?
Type of Job
Job is a crucial element to consider when analyzing a loan. This is because the individual’s ability to repay is determined by their income. People with steady jobs and fixed incomes are preferred for financing. Banks prefer government/government sector personnel due of their job stability. Doctors, attorneys, engineers, and chartered accountants working in top companies are the second most common home loan borrowers.
Financial institutions take great care when making loans to self-employed people and contractors. Such individuals are required to present account books and ITRs for the previous few years. The applicant’s present pay, as well as future salary increases, are important considerations when applying for a loan. Now a days it same in case of software employees too.
Spouse or Partner’s Job
Nowadays both husband and wife are working, so in case if your spouse or partner are working a combined loan can be obtained based on the income of the applicant’s spouse or partner. This not only improves loan eligibility, but also raises the likelihood of home loan approval. Because you have multiple sources of income, then you have a greater ability to repay. If the home loan is approved in the wife’s name, the interest rate will be five basis points lower than the standard rate.
Consistency in Job
Banks or Financial companies consider a person’s stability before approving a loan. Banks have a negative attitude about people who shift jobs. Financial institutions are hesitant to lend to individuals who work for a corporation with a questionable track record. Individuals with at least three years of experience in the same organization will be given preference. The longer a person works for an organization, the higher their chances of approving a loan.
Location of Property
Banks also examine the property’s location for faster loan approval. Banks want properties that can be easily or quickly sold. Compared to remote households, properties conveniently located near schools, shopping malls, train stations, and hospitals are more likely to receive loans. If the property is too far away, banks will hesitant to approve the loan. so it better apply loan for the property which is popular or demand area.
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Previous Loans
If a home loan applicant already has loans and pays EMIs, his loan eligibility would be decreased. Borrowers who fail to make payments raise the suspicions of financial institutions. As a result, making timely EMI payments is critical.
Depends on Age
Age is an important factor considered by financial institutions while sanctioning a home loan. Banks consider people in the age group of 30-50 years as the best candidates for getting a loan. Because they have enough working years left to repay the loan. Banks believe that people in this age group have higher earning power to repay the loan. Younger people have higher chances for loan approval.
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Others
Aside from these, the applicant’s credit score, down payment amount, loan tenure, and other factors also influence loan acceptance.
Conclusion
So while applying for a home consider the above points which helps in approving home loan fast.