Three Simple Ways To Improve Your Chances Of Home Loan Approval
A house is one of the biggest purchases you can make throughout your life, and if you’re in the market to buy one, either to live in, or to use as an investment property, then chances are, you’ll need to take out a home loan. Home affordability has risen sharply in the last two years, with home rates declining and interest rates on loans falling to their lowest. So if you’re planning to buy a home, chances are you want to get the maximum loan amount possible. If you’re a first-time home buyer, cracking the home loan eligibility requires some research.
A home loan is an amount of money lent to an individual borrower by a bank or other loan provider for that individual to finance the purchase of a property. The lender and borrower will agree on a term in which the loan is to be paid back, typically, this will be a period of 25 to 30 years. The lender and borrower will also agree on a repayment schedule, which will generally be fortnightly or monthly but can vary. Home loan eligibility is a key reference point for banks, non-banking finance companies (NBFCs), or housing finance companies (HFCs) to ascertain the maximum loan amount a home loan applicant can borrow and assess her/his trustworthiness to pay back the loan.
Maintain your credit card score
There are many ways to boost your eligibility for a home loan. Most lenders check credit scores before approving an individual for a home loan. The CIBIL score determines how good you are with your investments, previous loans, and your financial position. To maintain a good score, you must have a clean financial record. Make sure your credit cards aren’t unpaid and clear off all your outstanding debt, if any.
Hold off any career change
Most lenders like it if you’ve been with the same employer for a minimum of six months, not including probation periods. Sticking with your employer while going through the home-buying process is crucial. Any changes to your employment or income status can stop or significantly delay the mortgage process.
Lenders approve your home loan based on the information provided in your application. Taking a lower-paying job or quitting your job to become self-employed throws a wrench in the plans, and lenders must reevaluate your finances to see if you still qualify for the loan.
Be wary of credit card limits
The higher your credit card limit is, the less money a lender can responsibly lend to you. With that in mind, reduce your credit card limit or close it down altogether if you’re applying for a home loan. But do it a bit before you apply for a home loan, as closing credit accounts can affect your credit score. You stand a much better chance of being approved for a home loan if you stick to just one credit card with a reasonable limit.
More in Financial Planning
5 Things You Should Not Do With Your Money
Every day, we spend our hard-earned money on things that we need and want. We work to provide for ourselves and...July 1, 2023
The Advantages of Investing Your Tax Refund
Investing in your tax refund can be a smart financial move providing several advantages. Instead of treating your tax refund as...June 21, 2023
Sean Diddy Pays Sting $5,000 DAILY for “Sampling” His Song
Sean Diddy, one of the most prominent names in hip-hop and rap music, has recently revealed that he pays an incredible...June 14, 2023
Ford & Tesla: Key Differences Between Two Automotive Titans
Ford and Tesla are two prominent names in the automobile industry, each with a unique approach to designing and manufacturing cars....June 7, 2023
Lawyer Compensation Guide: How Much Do Professional Lawyers Make?
Becoming a lawyer is no easy feat. It requires years of education, hard work, and dedication to the profession. With such...June 2, 2023
Everything Students Need to Know About Paid Internships
Internships offer students the chance to gain real-world experience in their chosen field of study. While some internships are unpaid, paid...May 23, 2023
The Importance of Financial Literacy
Financial literacy is the knowledge and skills required to manage personal finances effectively. It includes everything from understanding how to create...May 17, 2023
“Blacklisted:” Who Can NOT Own a Ferrari?
Ferrari takes the rules and regulations of owning one of their prestigious cars extremely seriously. To ensure that only the most...May 8, 2023
Four Investment Tips for Millennials That Are Absolutely Essential
Millennials are always known as big spenders! Generally, they prefer to buy luxuries rather than saving their salaries and investing in...May 4, 2023