Solutions Of Your Home Loan Problems

Home Loan

Securing a home loan might seem next to impossible, but it is not so. There are different banks which help you in guiding through the entire process, but there are several problems that you may face while you go for a home loan.

This article will help you in getting clear about all the problems arising in this sector.

Early application rejection

Bank executives might return your home loan applications at the starting only. It can be any reason due to the large difference in the amount needed by the borrower, and the amount lender is about to sanction based on the eligibility of the borrower. There are many reasons for it; it is also possible that the person claiming the loan could not qualify on different parameters such as age, experience, income, credit score, documents, etc.

Solution: To prevent your application getting rejected at the initial stage, check the eligibility requirements of the bank before applying. Keep in mind what you want out of this loan and whether your documents are there or not. Providing correct information and documents on time will help you in going through the selection process smoothly.

Sanctioned amount less than expected

The amount of home loan that the bank will give is based on the repayment time and capacity of the borrower. But these are not the only parameters. There are other parameters also such as the financial history of the borrower, unpaid loans, monthly average bank balance, and stability of the employment. The lender will only decide after he goes through all the factors.

Solution: So that you become more eligible for the loan, try to add on your all sources of income and then present it to the bank or the lender.

Which interest rate type is better?

Borrowers may fall into a situation where they are not sure of the loan they should take. It can either be fixed or floating rate home loan. When you have to choose between both, try reading the loan agreement very carefully. As per the agreement, the bank has the full authority to increase the rate after every two years as per the contract. In the floating rate regime, banks may not give you the benefit of a lowered interest rate.

Solution: Thoroughly go through all the terms and conditions of the loan and clear your doubts if you have on any of the clauses. Be aware of the interest rate fluctuation in the market so that it helps you in getting a clear idea about it.

The excess burden of down payment

Generally, 10 % or tops 20% amount of the total property value is paid as a down payment. It is mandatory, and if the borrower does not pay this to the lender, then the lender refuses the home loan. The problem arises when the bank assigns less value to the property, in that case, the down payment increases, and that becomes an extra burden on the home buyer.

Solution: If the property is valued in advance, then you can adjust the down payment accordingly. In case, if you are falling short on money for the down payment of the home loan, you can make use of LIC policies, Provident Funds, and National Security Certificate also. Some banks accept these instruments for the down payment. You should check the down payment requirements of various banks and go with the one that suits your budget or requires the lowest amount.

Not furnishing the documents in the prescribed bank format

Some of you don’t provide the NOC (No Objection Certificate) documents and title deeds in a prescribed bank format. And this results in the rejection of your home loan applications.