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Navigating the Home Loan Verification Process: Dos and Don’ts

Home loans are hugely popular these days. These are a type of secured loan in which the property bought with the loan money serves as collateral. Since home loans are secured loans, lenders charge a low interest rate on them. In fact, home loans are the cheapest of all loans. They also come with a flexible and long repayment period, which makes loan repayment easy. These are the factors directly responsible for the growing popularity of home loans and it is therefore not very surprising that almost 90{f25b08510a848de72daf994cf4f788facacd51f75a5a50cf973c92cebca6f135} of homebuyers avail of a home loan to help them fund the purchase of their home. 

These days, there is no dearth of lenders to choose from and yet every lender receives thousands of home loan applications each month. This, in turn, makes it extremely important for lenders to spend time on each application and verify all the documents and information provided. This is crucial and must be done to ensure the financial well-being of both the lender as well as the borrower. So, how does the home loan verification process work? 

After you have submitted your home loan application along with all the required documents, your lender will move ahead with the home loan verification process.  During this step of the process, your lender will go through all the documents and information provided by you and verify their authenticity. Further, during this step, your lender will also check your credit score and income and job stability to analyze your repayment capacity and creditworthiness. If your lender is satisfied, they will move to the next step, which is the legal verification of the property you plan to buy with the loan money. For this, your lender will hire lawyers and experts who will go through various property documents, such as title deed, NOC etc. The idea is to make sure the property is free of all kinds of legal dispute. Once the property passes the legal verification step, the process will move to the technical verification step. During this step, your lender’s representatives will inspect the property in person and check its physical health. If all steps of the home loan verification process go well, your home loan will get approved. 

So, what are the dos and dont’s of the home loan verification process? Read on to know. 

The Dos of the Home Loan Verification Process 

1. Do Check Your Credit Score 

When it comes to home loans, approval depends very majorly on one’s credit score. The credit score is a three-digit number assigned to a borrower based on their repayment history, credit utilization ratio, debt-to-income ratio, hard enquiries on their name, etc. A borrower’s credit score signifies their creditworthiness– a high credit score, i.e. anything between 750 and 900 indicates high creditworthiness and repayment capacity and a low credit score indicates increased chances of loan default and high risk for the lender. 

If you want your home loan application to get approved quickly, check your credit score before beginning the home loan process and move ahead only if your credit score is at least 750. If your credit score is below 750, do not worry. It is possible to improve one’s credit score. So, improve your credit score and then apply for a loan. 

2. Do Keep All the Required Documents Ready 

All lenders require borrowers to submit certain documents along with their loan application. For instance, borrowers are asked to attach their KYC and Income Proof documents. These documents too help lenders assess a borrower’s repayment capacity. Similarly, all lenders also ask borrowers to attach all property-related documents, such as title deed, NOC, etc. Before beginning the home loan application process, go to your lender’s website and check the list of documents you will need. Keep all these documents ready for a smooth and hassle-free loan application process.

3. Do Check Your Eligibility for the Loan

All lenders have strict eligibility requirements for home loans. These requirements revolve around factors, such as credit score, income and job stability, age, income, city of residence, etc. Before beginning the home loan application process, go to your lender’s website and check their eligibility requirements. Move ahead with the home loan application only if you meet your lender’s qualifying criteria for a home loan. Inability to do so will automatically lead to home loan rejection and reduced chances of getting approved for a home loan in the future.

4. Do Remain Patient 

Once home loan borrowers decide to avail of a home loan, they want to finalize their property purchase as quickly as possible. This often leads to them becoming impatient. Please keep in mind that the home loan verification process takes a bit of time. Depending on your lender, it could take from a few days to a few weeks, so be patient.

The Don’ts of the Home Loan Verification Process 

1. Never Provide Wrong Information 

Sometimes borrowers want their home loan application to meet with quick approval so badly that they include wrong information in their loan application. They think that if they lie a little, it won’t make much of a difference. However, this is not the case, even a small lie or a wrong piece of information provided by you will lead to your home loan application getting immediately rejected. 

2. Don’t Apply for a Home Loan Amount Higher than What You Qualify For 

You may want to buy a home worth Rs.1 Crore, but if your income does not support the home loan you will need to buy such an expensive home, your home loan application will meet with rejection. Before beginning the home loan application, use a home loan eligibility calculator to figure out the loan amount you qualify for and do not apply for a loan amount higher than this or your loan application will get rejected.

Final Words 

Home loans are an excellent way to get approved for a loan. However, getting approved for one is not easy these days. Keeping the information mentioned in this article will certainly help you get approved for a housing loan quickly and that too on lucrative loan terms and conditions. 

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