Three Simple Ways To Improve Your Chances Of Home Loan Approval
A home is one of the largest investments you may make in your lifetime, and if you’re in the market for one, whether to live in or as an investment property, you’ll likely need to obtain a mortgage. In the past two years, housing affordability has increased significantly due to lowering property prices and loan interest rates reaching record lows. Therefore, if you intend to purchase a property, you may like to obtain the largest loan amount available. If you are a first-time homebuyer, you will need to conduct some research to determine your eligibility for a house loan.
A house loan is the amount of money a bank or other loan provider lends to an individual borrower in order to fund the purchase of a home. Typically, the lender and borrower will agree to a repayment period of between 25 and 30 years. Additionally, the lender and borrower will agree on a payback plan, which is often biweekly or monthly but can vary. House loan eligibility is a major reference point for banks, non-banking finance companies (NBFCs), and housing finance companies (HFCs) in determining the maximum loan amount a home loan applicant can borrow and evaluating his/her ability to repay 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 on any career change
Most lenders prefer that you have been at the same employer for at least six months, excluding probationary periods. It is essential to remain with your company throughout the home-buying process. Changing your work or income status might halt or significantly delay the mortgage application process. Your mortgage is approved based on the information supplied in your application. Lenders must reassess your finances to see if you are still eligible for the loan if you accept a lower-paying job or quit your employment to become self-employed.
Be wary of credit card limits
The greater your credit card limit, the less a lender can lend you responsibly. In light of this, cut your credit card limit or shut it entirely if you are looking for a mortgage. However, do so before applying for a mortgage, as cancelling credit accounts might impact your credit score. You have a far higher chance of being accepted for a mortgage if you restrict yourself to one card with a modest limit.
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