Getting a home loan might look simple and sound easy but it is a lengthy procedure. The home loan product advertises conceal the fact that there is a lot of hiccup in the process of getting a loan sanctioned. Often loan borrowers face some sort of problems in getting a loan and home loan emi.
Common problems that the borrowers often face
Some loan applications get rejected in the first test. The incompatibility between the lender’s requirement and the borrower’s qualifications does not allow the loan application to pass. This could be due to age criteria or income criteria or problems in the submission of proper documents as conducted by the bank or the financial institution. The key to success is finding a suitable lender that allows you to apply today, even with a less than perfect track record, and then offers you an instant decision and loan agreement.
The banks ask for a requirement of 0.25 to 1 per cent of the loan amount for submission with every application form as the processing fee. The bank authority generally does not refund the processing fee. If case the bank finds you unsuitable of sanctioning the loan, they won’t return the processing fee. All the verbal statements of the bank authority turn to be useless they are documented in a proper and legal way, such as through signing a promissory note as a way to indicate that the applicant will be committed to making repayments on time.
A person will not get the amount of loans he desires. Monthly income, capacity of repayment, financial history, other unpaid loans, payment history of the past, history of the credit card usage, any history of bounced check, the average balance of the banks, years to retire from employment, nature of the employment- all these are the parameters of the bank to judge if the bower will be sanctioned the loan amount. Depending on it, the bank authority will also decide the loan amount and the home loan emi .
The home loans comes to be a dilemma to almost every borrowers when to decide whether he will go for a interest with fixed rates or floating rates interest.
The bank has its own formula to value a property by its own legal and technical and financial experts. The property value generally is lower than the price the individual quoted for the property.
The bank refuse s to sanction the borrower the loan amount if not the borrower is ready with the down payment amount.
Important tips for avoiding rejection of loan sanction
Selecting a bank that matches your profile and proper documents will not stop the sanctioning of the loan. Accurate documents in the verification process will make the loan pass.
You can keep sufficient funds in the NSCs, provident funds and LIC policies as collateral and apply for home loan to the bank. If you are rejected due to eligibility criteria, you can make a co- borrower and increase eligibility criteria by showing the income of your partner.
Check the history of floating interests and verify how interests on home loans dropped during low interest periods. Get the property valued from a bank approved valuator before applying for home loan to avoid problems with property valuation. You can choose the bank which says to deposit a least down payment and home loan emi that fixes in your budget.
The common problems can be avoided if the borrower follows a proper procedure with correct documentations.