One of the biggest decisions that we take in our lives is the decision to buy a new home. Making this decision, however, is only half the job done. The next steps include listing out the fundamental features you seek in your new home, browsing and shortlisting properties that meet your requirements, and most importantly, applying for a home loan to make your dream a reality.
While the bank you are applying to will ensure that you undertake all requisite steps to ensure a speedy loan approval, here are some things banks are unlikely to tell you:
Step #1: Make A Strong (Bank) Statement
This is one of the most important documents that you will need when you are applying for a home loan. It is also very closely scrutinized by the bank lending you the money as it is an indication of your creditworthiness.
• Make sure it is up to date and active.
• Highlight all non-recurring expenses.
• Make certain that you do not have a history of bounced cheques or skipped EMIs.
Step #2: List Your Non-liquid Assets
Banks will lend you money far more easily if they are convinced that your family has sources of income other than yours.
• If your spouse has an income, mention it.
• Mention your parents’ income.
• Highlight immovable assets that are in your name.
• Talk about your social standing.
Step #3: Offer Additional Business
Banks look favourably at customers who will be loyal to them beyond a transaction. Therefore, when you are discussing the loan application, make it a point to talk about:
• Opening savings accounts for your family with the bank.
• Buying insurance products and mutual funds from the bank.
• Investing in a locker facility with them.
These can also act as your security in case of default.
Step #4: Highlight Security and Stability
Highlight the fact that the job you are in or the business you own is steady, and its stability is well within your control.
• Mention the increments and bonuses given to you in case you are a salaried professional.
• Make sure you have not changed your job too often – you should have worked for at least two years in a company.
Step #5: Limit Your Existing Liabilities
It is not only important but also ethical that you reveal all your existing loans and financial liabilities to the bank. Before you apply for a home loan, make sure:
• You evaluate your current commitments.
• To reduce your monthly loan or EMI bills.
• That loans and EMIs make for less than 40% of your monthly income.
Once you follow these steps for a quick home loan approval, getting the keys to your dream home should only get easier.