Buying a home is one of the biggest milestones for many of us. It’s a dream come true when you finally take the steps inside your own home. However, before you experience the boundless joy, there are some obstacles that may make the process seem a little daunting. Especially if you’re applying for a home loan for the first time, you might have a series of doubts and questions in your mind. After all, it’s an important step in making your dream a reality.
We bring you some valuable tips to help you qualify for your dream home’s loan:
1. Maintain a Good Credit Score
One of the first things that banks consider before providing a loan to a potential buyer is their credit score. Having a CIBIL score of over 750 will help you avail a loan easily and also ensure better interest rates. It’s not tough to maintain a good credit score. Make sure you pay off existing loans on time and pay your credit card bills timely every month.
2. Consider Your Down Payment
Although earlier you needed at least 20% or more down payment for a loan, many banks and financial institutions are now offering loans for a lower down payment amount, too. However, for the long term, it is always recommended putting down 10-15% down payment to reduce your EMIs if you have enough savings.
3. Demonstrate Employability
For you to qualify for a loan, the financial institution needs an assurance that you can pay it back in a timely manner. Usually, having a steady job for at least two years is a minimum qualification. If you’ve changed jobs recently or switched to another industry, getting a loan might be tricky. But if you can show a steady income, you have nothing to worry about!
4. Aim for Affordability
Although there are many options to buy a home and get a loan, it’s easier when you opt for an affordable property. While you should be able to pay the fixed EMIs, you should also be able to adjust them comfortably in your current lifestyle without many changes. So even though it’s best to own a home you like, in a location you prefer, it’s equally important to have a home loan that you can afford.
5. Choose Wisely
When you decide to opt for a home loan, there are many factors to consider – for instance, which bank to choose, what’s the best repayment tenure, interest rates, and more. It’s also important to know about the changing RBI norms for foreclosing for a home loan in less than the committed time. It saves interest and improves your credit score.
6. Embrace Technology
Today, luckily for home buyers, technology has made it easier than ever to check their eligibility for home loans. You can use any EMI calculator online or home loan tools to help you understand how much of a loan you can afford and qualify for. This makes the final process a lot easier. Plus, many banks offer other tools and technologies to ensure your loan processing and repayment schedules are simplified with the latest innovations.
It can be overwhelming to think about your home loan and wait till you get the green signal from the bank. However, with the latest government schemes and ease of banking, it’s now much simpler and faster to get a loan for your dream home!
All the best!