Owning a home is one of the biggest goals of a person in his/her life. Buying a home is certainly the most important investment decision a person would take in their lifetime. A large number of Indians rely on mortgage or home loans to realize their dream of owning a home. Just like the loan borrowers do their research on lending institutions, the lenders to carry out a background check on the borrowers in terms of their current financial condition, past credit history, monthly income and their repayment capacity. In order to avoid your loan application from being rejected let us look at what are the parameters the lenders judge the borrowers by.
What do lenders look for in loan borrowers?
The housing finance companies in India primarily look for two factors while approving home loan applications. The first and most important factor is Profit and the second factor is the ability to repay the amount availed. While availing home loan, you must know that the housing finance companies too are like any other business and their main motto is to earn profit. The lenders ensure that they get profitable returns on their investment by checking the financial status of the borrowers and ensure financially sound to pay back the money.
Why is important to maintain good credit history?
Credit history is one of the crucial factors that the housing finance companies consider for lending home loans. This is because your credit score says a great deal about the kind of borrower you are. It gives the lenders a fair idea about your financial credibility. The lending institutions use the credit score of the borrower as an industry standard to accept or reject their applications. Majority of housing finance companies in India require you to have a minimum score of 620 to qualify for home loan. Hence, if your credit score is below 620 there is a great chance that your home loan application gets rejected. Even if you get your loan approved, you may have to pay higher interest than others who have a good credit score.
Apart from the financial status and the credit history of the borrower another vital factor lenders consider is documents related to the property. No matter if you are applying for home purchase loan or home construction loan, you need to have all important documents related to the property ready to avoid delay in loan disbursement. Moreover, if you are applying for home construction loan, you need have the approval from appropriate civic authorities. The lenders appoint a special team to assess the credibility of these documents before sanctioning the loan.
Thus, while availing home loan from any housing finance company it is important that you think from the lenders perspective as well to know what are their requirements and proceed accordingly. If you are availing home loan from Indiabulls Housing finance limited, rest assured you would get full support from our executives.
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