5 Key Points That Make Or Break Your Claim For Home Loan
Those looking to apply for a home loan must keep it in mind that there are several factors based on which banks decides whether they are going to accept your application. Let us sum it up for you in five points.
Your line of credit
Banks prefer loaning to a person whose finances are in order. That is, if the person is seen to be active with the figures in his bank account, the bank assigns a respectable line of credit to that account holder. This simply doesn’t mean withdrawals or purchases alone but also instances like timely repayment of installments in the past, honouring all the cheques and scheduled electronic transfers, minimum balance, etc. A credit score is assigned to every individual, based on the above mentioned parameters. When the score is 700 or above, the person can expect faster processing of the loan. A score less than 300 usually means that the loan gets rejected.
The bank would examine the prospects of the property that you are trying to buy. Permits, clearances, completion certificates, etc., are all vital to convince the bank that this is a legitimate project that you wish to borrow the amount for. It does help if the real estate project and/or developer have some repute to their brand, as it helps reaffirm the bank’s mind about lending the money.
The bank does not care about what work you do for a living, as long as it is legal and justifies the loan as well as your capability of repaying the same. Banks are sanguine about loaning money only to those who can repay it.
The bank wishes to confirm if the person can return the amount of money they have loaned. This is ascertained by not only checking his income sources but also the expenditure. If the loan applicant has any outstanding loans, the bank checks how soon it shall be repaid or whether the person can repay both installments at the same time. As a thumb rule, a bank would always sanction a loan of not more than 40-50 per cent of your monthly income.
Given the fact that banks have an undeterred focus on loan repayment, individuals who are in the age group of 30-40 years are more likely to secure loans. They are not likely to retire soon which helps. However, this also means, it is difficult for senior citizens to secure loan, if not completely impossible.