Five things that matter for Home Loan Applicants

1. Applicant’s Age and Income

Banks look beyond your salary and age. “Housing loan eligibility is calculated on the basis of the income of the applicant and the number of working years left. A person who is 50 year old and earning Rs. 105 Lacs per month could take a loan of Rs. 60 Lacs and in another case a 30 year person with same earning amt is eligible for a loan of Rs. 94 Lacs. The latter has 20 more years to repay the loan. As a housing loan is a 20-25 year-long contract, lenders need to be sure of your repayment capability. Lenders prefer applicants employed with a particular firm for at least a year. Says Sukanya Kumar of RetailLending.com: “Banks can be sceptical about giving loans to first-time entrepreneurs. Those working for firms with less than 50 employees also face difficulty.” Your profession could play spoilsport. Some banks do not lend to media professionals, lawyers and policemen.

2. There are so many enquiries

Making so many enquiries for a housing loan could mar your chances of securing one. You asking around for the best rates could be misinterpreted by prospective lenders. If you are trying to take housing loan then bank making so many enquiries. The best rates could be misinterpreted by prospective lenders. It would seem like nobody is ready to lend to you. This lowers your credit score, even if you have not availed of any loan. Every time you enquire about a loan with a bank, the bank checks your credit score with a credit bureau. This is considered to be an enquiry and you are termed “credit-hungry”, even if you were only shopping around for the best deal. Remember, each enquiry pulls down your credit score by 5-10 points. So go easy on those calls.

3. No credit history

If you don’t having any legal credit history it means you are under the illusion. If there is no credit history it means there is no way the lender can evaluate your creditworthiness. If not servicing any credit at the time of applying for a loan could also lead to a loan rejection. So it is better idea to use your credit card once in a while for small spends. Not getting a No Objection Certificate on a previously closed loan and late payments for credit card dues, previous loans or an unpaid telephone bill can all go against you when the lender is evaluating your loan application.

4. Your Property Status

If you are going to apply for Loan then bank wanted to know your background like how much property do you have and where is your property location. Mostly banks lend only to select builders. If any person, projects or developers who is Blacklisted could be a reason for your loan application being rejected. Banks sometimes selected to lend for only those developers they have a tie-up with. Banks are Avoid buying very old properties as lenders are rarely too keen on them. Even if they do lend, you will get only a part of the purchase price as there is a likelihood of a structural collapse in future. Most banks employ professionals to evaluate a property. The approval for the amount depends on their evaluation. Unclear titles result in rejection of loans.

5. Your Family background

If you are a woman, your marital status may be creating a problem. Despite many lenders offering women-specific housing loan products, banks can be reluctant to lend to a single working woman, as they fear the woman might stop working post marriage and put the repayment in jeopardy. If you are a tenant of a loan defaulter or have one as your tenant/family member, you will find it difficult to secure a loan. Also, do not apply for a home loan jointly with your sibling, it will be rejected.

Source: http://bit.ly/Five-things-that-matter-for-Home-Loan-Applicants