Imagine you want to a buy new or resale property in India. You can’t even think of dealing in full cash to buy the dream property as you’re already occupied with prior financial commitments and other family responsibilities. So, either you have to borrow from friends/family or take a housing loan to finance it. The
Many Home Loan applicants don’t give value to Home Loan documents while applying for a Home Loan. They don’t know that documents may affect their eligibility. Want to dig deeper? Read on! You apply for a housing finance and already dreaming of residing in your dream home! But, the creditor rejects your loan applications, what will you do? Yes, today’s Home Loan application and approval process is exhaustive. Many issues spring up including no submission of the relevant housing finance documents, leading to a Home Loan rejection. Yes, your Home Loan documents will affect your loan application. Let’s discuss some vital points that may affect your Home Loan application. Factors that may affect your Home Loan Application You are a Bad Paymaster Creditors often check on time bills paying history as a benchmark when it comes to analyzing your Home Loan repayment capability. If you often miss out paying your bills on time, it will lower your credit score. If you have a bad credit score, it pretty much sums the idea of your Home Loan application passing. So, if you are a bad paymaster, you need to increase your consistency of the CIBIL score. Do this by paying bills on time if you want your Home Loan to approve. Applying for a credit that you are not eligible for If you think trying your luck while applying for a home is a good idea, think again! The lender will not only reject your housing loan application, but it will affect your credit score. It will make future loan application even tougher. If a creditor rejects your loan, do not panic. Find the reason for the rejection and try to rectify it for future when you again go for a loan application. If You Have More Debt and Not increasing Your Income If you have an ongoing Home Loan and not paying the outstanding amount or the EMIs every month, a creditor may reject your loan application. They may assume that you don’t have enough repayment capacity if you take another loan. A lender may reject your house loan application if you are yet to settle your previous outstanding debts. What to do? Try to pay all your outstanding bills to become eligible for a loan approval. Have a salary hike in the pipeline? Get an advance salary hike or promotion letter from your employer to prove your income stability. It may prove fruitful if you are to apply for a Home Loan or any loan. Unable to provide all the Relevant Documents If you do not submit all the relevant documents which a lender needs, even this may reject your loan. You must submit proper Home Loan documents for your Home Loan application to approve. Make Sure to provide all the following vital Home Loan Documents Identity Proofs– Voter ID Card, Passport, Driving License, Aadhaar Card, PAN Card, Job Card issued by the NREGA Address Proofs– Voter ID Card, Ration Card, Passport, Driving License, Utility bills – Electricity, Water, Gas, Telephone, Post-paid mobile – Not Less Than 2 Months Old Age Proofs– PAN Card, Passport, Driving License, Birth Certificate, 10th Grade Marks Sheet Income Proofs– Salaried Individuals– Appointment Letter, Form 16, Last 3 Month Salary Slips, Last 3 Years IT Returns, Investment Proofs –FD Certificates, Shares And Any Other Fixed Assets, Increment/Promotion Letter, If Any Self-Employed Applicants– A short introduction of your business or profession, balance sheet, profit and loss statements, Last 3 years Income Tax returns certified by a Chartered Accountant, establishment certificate under the Factories Act or Shops And Establishment Act, Investment Proofs – FD Certificates, Shares And Any Other Fixed Assets, practice certificate if you are a doctor Inconsistent Employment Stability Lenders also see your employment stability about how long you have worked for a company. If you switch jobs, service providers may see it as employment instability. They may assume that you may not repay a loan. Creditors consider employment stability while determining your Home Loan eligibility, take care. Do not switch jobs especially while applying for a Home Loan. Stick to an employer, let the income flow in without hiccups and you will be on your way to land a probable Home Loan. The Bottom Line Many Home Loan applicants face rejection from lenders these days. Because they don’t fulfil many basic eligibility criterion including the Home Loan documents. Make sure you fulfil all the discussed points for a faster loan approval. If you fall short, this is the right time to improve your consistency and be Home Loan eligible.