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Pune is a premier manufacturing hub, and it has over 800 educational institutes. Also, the city has developed as a prominent IT destination over the past few decades, which has led to a considerable number of professionals moving to this city to pursue their careers. Thus, the housing sales in Pune have increased by 18% during the calendar year 2018-19.
These factors, coupled with the easy availability of a home loan in Pune from several reputed financial institutions, have led to the massive growth of the housing sector.
Home loans are long-term, and lenders conduct a thorough inquiry before approving an application. They consider various factors before approving an application.
You will be able to avoid rejection of your home loan application by following the steps mentioned below –
- Reduce Existing Debt Obligations
If a borrower has any existing debt, they should consider repaying it before they apply for a home loan. Lenders may consider the current debt obligations of a borrower as a risk factor. Also, approving an additional credit may increase the existing financial burden on an applicant, and they may end up rejecting a home loan application.
- Do Not Borrow More Than You Can Repay
The loan amount is another factor that can affect the eligibility of a borrower. Lenders may consider an individual applying for a high amount as credit-hungry and end up declining the application.
Also, the EMI’s can add to the financial burden on borrowers. They can use an online EMI calculator to determine their monthly debt obligations and apply for a loan amount accordingly.
Furthermore, borrowers can also opt for a high downpayment to reduce their debt obligations and subsequently increase their eligibility.
- Add a Co-Applicant
Having a co-applicant for a home loan can help to significantly increase the chances of an application getting approved. In the case of a joint loan, both individuals are equally responsible for the timely payment of the EMIs. Hence, adding a co-applicant with a decent credit history reduces the risk factor of a lender.
Also, financial institutions can offer a high loan amount and a better housing loan interest rate when individuals apply with a co-applicant.
- Opt for a Longer Tenor
Borrowers can significantly increase their home loan eligibility by opting for a longer tenor. Lenders will consider the fact that borrowers have enough time to repay a loan effectively. So, the possibility of default decreases and subsequently, the risk factor for the lenders.
Hence, borrowers must avail a home loan from such lenders that offers an extensive range of tenor so that they can keep their EMIs affordable.
- Improve your CIBIL Score
Financial institutes determine the creditworthiness of borrowers by considering their CIBIL score for a home loan. Lenders are more likely to reject the loan applications from a borrower who has a credit score lower than 750.
Having a track record of late payments, EMI bounces, high debt utilization ratio, and other negative entries in a credit report can also lead to denial.
Hence, borrowers should maintain a good CIBIL score and clean credit report so that their home loan application does not get rejected.
You will be able to avoid rejection of your home loan application by following the tips mentioned above. However, ensure that you meet the eligibility criteria required by the lender before you opt for a home loan online application process.