For most people who are planning to buy a house, getting a home loan sanctioned is the biggest part of the deal. So, how can you improve your chances of your home loan application getting approved? In this article, we’ve put together a few useful tips for you.
Show Ability to Repay
When applying for a loan, you have to show that you are able to repay a home loan. This is one of the key requirements that lenders look at, before sanctioning a home loan. They would check your current expenses and all your other financial commitments. So, if you have too many repayments to be made, the lender will want to know about how you are planning to repay your debts.
Check Your Credit Rating
You should always make an effort to keep a check on your credit report. It’s important to access your report and see if you have any negative history or defaults. By checking out your credit report well in advance, you will get an idea of what your report contains before the lender accesses it.
During this time, if you find any information or markings that are not right, you can contact the company who had reported it to get it corrected. Having negative repayment history is not going to be good for you when you apply for a home loan. Remember, a good credit score can really help you seal the deal.
Have a Savings History
Showing the lender that you are good at saving money and are able to manage your expenses well are always a good sign when you apply for a loan. Having savings will also help you with your loan repayments and can also be useful in order to make your contribution when purchasing a home.
Don’t Apply with Too Many Lenders
It is very important for you to compare different lenders and see what they offer. However, never submit applications to too many lenders at once, since this would appear on your credit report. Hence, only submit an application after you have done all the necessary research and have decided to go with a particular lender.
Try to Have Stable Employment
Employment stability is a big plus point for you when applying for a home loan. Lenders look at how long you have been working for a particular company as this shows that you have a stable employment and would be able to repay your home loan. Changing jobs too often will not look good. Most lenders usually prefer a borrower to be with the current employer for at least six months – this does not include probation.
If you have changed your job recently, then the lender will check to see what you did prior to your current job. Hence, being in the same job for a period of two years can be satisfying to the lender and will help you meet the employment requirement.
Cut Down On Unnecessary Financial Commitments
Before applying for a home loan, make sure you cut down on all the unnecessary financial commitments since this could impact your application. When you apply for debts, there are inquiries done on your credit report. Too many credit enquirers will not reflect positively on your credit profile. Also, credit limits on all cards would be included in your repayments as well and this would mean that you wouldn’t have surplus cash available to meet on your new loan.
Disclose All Information
This is very important when applying for a loan. Be upfront about all your issues and never try to hide anything with regards to your finances. Disclose all the necessary information to the lender when you apply for a home loan because if during the process the lenders find things that are not disclosed beforehand, your loan maybe declined due to non-disclosure.
Always keep these points in mind whenever you apply for a home loans, as this will enable your chances of getting your home loan being sanctioned easily and quickly.