Applying For a Home Loan? 5 Most Important Points to Keep in Mind

Taking a Home loan is likely to be the biggest financial commitment you’ll ever make, so you'll want to find the best deal you can. And the good news is there’s plenty you can do to improve your chances of getting your home loan application accepted – follow our top 5 tips to help you get the Home loan you want.

1. Your Credit Score matters

Before applying for a home loan, get a copy of your credit report from CIBIL. This will allow you to see what Banks and Financial institutions see when they review your application.

If your credit rating isn’t looking that great, there are lots of simple things you can do which can improve your credit score.

2. Get your Paperwork Ready

When you sit down with a banker, they’ll need to see a few important documents in order to complete your loan application. It’s a good idea to have this paperwork on hand prior to that meeting. Here’s a quick checklist of the records you’ll need to prepare. Make sure you have the most recent copies of each of the following from the last two years:

·       Tax returns/Form 16

·       Income Documents and pay Slips

·       Bank and investment account statements

·       Existing loan statements, if any

·       KYC Documents

 

3. Create a Budget

Pulling your paperwork together will not only prepare you for your appointment with the banker, but also help you draft a budget. Taking a close look at your financial documents gives you a clear picture of how much you can realistically afford to pay for your down payment, monthly EMIs, interest, property taxes and insurance.

4. Start Saving

If you haven’t already, you’ll need to start saving as much money as you can for the down payment, which generally ranges from 10% to 25% of the home’s price.

 

5. Make a (realistic) Wish List

Think about what you want from your home and why you’re buying it. It’s rare to find a home that has everything you want, but it’s essential that the home you eventually decide on meets most of your current and future needs—while staying within your budget.

For example, if you’re planning on having a family in the near future and living in your home long-term, you’ll want to look for a house that you can grow into. Selling a home you’ve quickly outgrown can be a slow and expensive process. On the flipside, you also don’t want to make an extravagant wish list that’s difficult or impossible to achieve at your price point.

Do some online research to see what the average prices of homes are in your desired area and what you can get for your money. This way, you’ll piece together a sensible wish list you can share with your realtor.

Once these steps are taken care of, you’ll be more than ready for Home Buying!