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14 July 2021

5 Major Challenges Faced while Applying for Housing Loan

Are you on the verge of applying for the best housing loan in India? Have you heard that the loan application of your friends had been rejected by lenders? 

If you feel that your dream of buying a home using the best housing loan in India may be rejected, you may not be alone! 

On that note, it would be just right to find common home loan application problems and tips to avoid them. Read on!

The rejection of your home loan application 

One of the key problems that a borrower faces is the rejection of their applications. It may happen if you don’t furnish the right set of documents. It may also occur if you apply for an amount more than what your income can support. Thus, the best thing is to check your lender’s home loan eligibility terms and keep all documents ready. 

The evaluation of the property by your lender

The review of the property you want to buy using a home loan may not be a big issue. But you need to deal with it tactfully. Yes, the price of your home may be bigger than what a lender evaluates. In such cases, borrowers need to pay the difference amount. Thus, you should know its resale value and invest in one with much care. 

The loan processing charges 

Once you apply for the best housing loan in India, you need to pay a processing fee once you submit the application. The fee is not refunded even if you don’t end up availing of the housing loan. But the loan processing fee is charged only when after the sanctioning of the loan. 

Lower down payment amount 

No lender is going to provide you with a loan to cover the cost of your new property. While most of the top lenders may cover 80% or more, you need to manage 20% or more on your own. You need to start saving for this down payment amount, and failure to pay the same may lead to loan rejection. For example, if the price of your new home is Rs.40 lakh, you need to arrange Rs.8 lakh as the down payment amount. The higher is your down payment figure, the lesser will be your borrowable amount. In turn, you have to repay a lower loan amount, interest charges, and EMIs. 

Not getting the desired home loan amount 

One of the major housing loan complications faced by prospective borrowers is being unable to get the desired amount credited. It may happen due to many reasons, such as your CIBIL score, outstanding on earlier debts, a lower debt to income ratio, and more. A lender may also assume that your capacity to repay the best housing loan in India has gone down depending on your existing income and assets. If your CIBIL score is poor, it will have a major say in the approval of the best housing loan in India. A higher credit score may instill confidence in a lender to provide you with a higher loan amount. Hence, you need to take every step to keep your credit score well maintained at 750 or more. Repaying your loan and credit card EMIs on time, maintaining a mix of credits are easy steps to have a robust credit score. Once your CIBIL score improves, you can expect the best housing loan in India to be approved without hassle. 

You are now aware of the issues that a potential borrower faces while applying for a home loan. If you can work on discussed pointers, you can avoid all and help yourself get the approval for the best housing loan in India.

Additional ReadIs Switching Home Loan Good for You or Not? Know Here

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