7 Common Problems Faced by Home Loan Applicants
Usually, Home Loan complications arise due to a number of reasons. So if you are taking that big step and opting for a Home Loan to finance your dream house, you need to know about the complications that can play spoilsport to your plans. Read on to find out some of the more common Home Loan problems and how you can avoid them in future.
Most Common Home Loan Problems
One of the main issues faced by loan applicants is the outright rejection of the loan application at the outset. This can happen if you do not provide the right documents or if you don’t meet the lender’s income eligibility criteria. Also, if your lender is unable to authenticate the details you have submitted, your application will most likely be rejected. So make sure to have your documentation ready and in order.
Evaluation of the Property by the Lender
While property valuation may not look like that big a problem, it certainly is among the many that borrowers face. This is because the purchase price of your intended home might be higher than the lender’s evaluation of that property. In such cases, you will have to pay the difference yourself. Hence, you need to be wary of resale properties and carefully choose your real estate investments.
Loan Processing Fee
Bear in mind that there is always a processing fee involved in every loan application you submit. This fee, ranging from 0.25% to 1%, is not returned to you even if you don’t end up availing the loan. Loan processing fee can be charged only after your loan is sanctioned.
Insufficient Down Payment
While most lenders give you up to 80% of the cost of your home, you are required to deposit about 20% of the house cost as a down payment. You need to keep this amount on hand since failure to make an adequate deposit may result in the lender rejecting your application. For instance, if the cost of a house you are willing to buy is INR 20 lakh, then you will need to deposit about INR 4 lakh with the bank.
Lack of Guidance on Interest Rates
Another complication is choosing between the different types of Home Loan interest rates. Choose between fixed and floating rates depending on a careful analysis of your payment plans. You can also opt for partly fixed and partly floating interest rates if you want a flexible option. Financiers like, Bajaj Finserv provide 3 EMI-free months that can give you a breathing space if you fall behind on payments. Consider your repayment capability and make a carefully weighed decision so that the repayment schedule doesn’t overburden you.
Loan Amount not as Requested
One of the major Home Loan complications that borrowers face is not having the desired loan amount sanctioned. This could happen due to a number of reasons, such as a poor credit history, balance on previous loans, and credit-hungry behaviour. The lender might also feel that your potential to repay the loan is diminished, based on your current income and assets. If you want the right loan, a few companies like Bajaj Finserv offer Home Loans with approval in 5 minutes and other added benefits.
Your CIBIL Scores
Your credit score plays a major role in determining your Home Loan eligibility. Home Loan CIBIL problems include having a score that is too low to encourage a lender’s confidence in you. This is why you should maintain your finances with foresight.
These are just a few of the factors that ascertain your eligibility for a Home Loan. Be diligent enough not to make any of these mistakes and you’ll most likely walk away with a sanctioned Home Loan. If you are on the lookout for one right now, apply online for a Home Loan with Bajaj Finserv, who offers loans with instant approval and super-low interest rates.