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How To Get Home Mortgage Loan Approved: Step By Step Guide

According to a report published on Livemint, India’s loan against the property market was worth around Rs. 2.5 Lakh Crore in 2016, second only to home loans in the Indian mortgage loan sector. As predicted, in the financial year 2018-19 alone, the credit market for these secured advances grew at a rate of 21.8%. Prompted by this growth in the demand for such advances, various financial institutions have made availing mortgage loans such as loans against property easier for borrowers.

But before applying for such advances, prospective borrowers should learn the answers to some crucial questions like how to get the loan approved, is mortgage loan interest tax deductible India, and the likes to ensure that they are well-informed about every aspect.

Loans against property in India

  • 17 million – Total number of loans against property borrowers in India in 2018.
  • 30.4% – Year-on-year increase in total number of mortgage loan accounts since 2018.
  • Rs. 30.8 Lakh – is the average mortgage loan balance for each borrower in the country.
  • 60% – Growth in secured credit lending after the country recovered from the recession of 2009.
Now, even though financial institutions have made availing the advance easier, owing to its high demand, there might be instances where your loan against property application can be rejected. To eliminate any chances of this happening, take a look at the following tips to ensure that your mortgage loan is approved without any hassle.

- Check Eligibility Criteria

The first step in loan against property process of application is to check if you are eligible to avail the credits. The criteria to avail such advances vary from between lenders. But there are some common parameters like age, employment status and nationality that borrowers have to comply with to enjoy the benefits of a mortgage loan.

You can qualify for a loan against property by meeting a few simple eligibility criteria. These are –

For salaried individuals –
  • Borrowers should be between 33 and 58 years of age.
  • They should be employed with a Multinational Corporation, private company or the public sector.
  • They should be an Indian resident.

For self-employed individuals –
  • Prospective borrowers should be between 25 and 70 years of age.
  • They should have a regular source of income generation.
  • They should be an Indian resident.

- Gather the documents required

Availing a loan against property comes with nume benefits. For instance, if you ask the question – is mortgage loan interest tax deductible in India, the answer to it will be – yes, if the funds are used to finance the purchase of a new home. But to enjoy this benefit and more, you will first need to have your loan approved.

One of the most crucial aspects to it is to ensure that you have the requisite documents for the application. Some of the necessary documents required to avail the credits include –

For salaried individuals –

  • KYC documents.
  • Salary slips.
  • Bank account statements from the last three months.
  • Documents related to the property to be mortgaged.
  • Income Tax returns.

For self-employed individuals –
  • KYC documents.
  • Bank account statements from the last 6 months.
  • Documents of the property to be mortgaged.
It is worth remembering that your loan against property will be processed only after you submit all the requisite documents.

- Clear all your previous debts

Most financial institutions review a borrower’s credit history before deeming them eligible to avail the advance. That is why it is crucial to ensure that you do not have any outstanding debt or previous loan defaults that might reflect negatively in your repayment history, and consequently on your credit score.

Thus, one of the most important factors in the loan against property process of approval is to make sure that you do not have any existing debts.

- Repayment capability

Borrowers with a higher income can avail a larger loan amount against their property as they have a just as higher capability to pay more as EMIs. An applicant with a salary of Rs. 30,000 can avail a Rs. 20 Lakh loan against a property may even be worth Rs. 1 Crore. Another applicant with a salary of Rs 45,000 per month can avail a loan as high as Rs. 32 Lakh on the same property. Note that lenders can offer up to 75% of property value as a loan against the property.

- Apply for a joint loan

Your chances of availing your mortgage loan application increases when you apply with a co-applicant. Especially, if you have a low credit score or do not meet the requisite criteria for income, applying with your spouse or any other family member can be beneficial while availing the advance. Additionally, a joint loan can also allow you to avail a higher loan amount as well as perks.

With these few tips in mind, successful applications for the loan become easier. On approval, you can enjoy a high loan amount value, unrestricted end-usage, easy disbursal, and avail tax benefits on your loan against property. Thus, it is crucial to be well-informed about the finer details about the loan to ensure that you can get it approved without hassle.
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