Nitin was a first-time homebuyer. His parents had never owned a house. So, he had very little knowledge about the home-buying process. Just before applying for a home loan, he spoke to his cousin Ashish. It turned out to be a fruitful conversation. Ashish had recently bought a property. So, he informed Nitin about some common mistakes related to home loans.
Are you too looking to apply for a home loan? Look at the points mentioned below to ensure you do not make these mistakes. This will make it easy for your loan to get approved.
- DO NOT apply to multiple lenders
Each time you apply for a home loan, it hits your credit score. If the lender rejects your application, it will lower your score. Say, you apply to multiple home loan providers at the same time. Each one will make a CIBIL query and find out about the other applications. This will decrease your credibility as a customer, and may also lead to rejection of all your applications. You can only imagine what will happen to your credit score thereafter.
- DO NOT provide incorrect information
You may be tempted to fill in some incorrect data on the loan application form. You might think this will increase your chances of loan approval. Many people enter false information related to their income, credit history, and age on the form. But remember the bank will verify all these details. They may detect the discrepancies, and it would lead to loan rejection straightaway. So, always be truthful in your application.
- DO NOT opt for high EMIs
You may be in a hurry to close your home loan. But avoid opting for higher EMIs. Instead, set your EMI payments after ensuring you can meet other expenses first. If your EMI is too high, you may struggle to pay it. And if you don’t pay it, you could end up defaulting on the loan.
- DO NOT buy disputed property
Do not submit a loan application for a disputed property. Lenders give you the loan only after verification and valuation of the property. So, make sure that there are no legal or licensing issues related to the property you wish to buy.
- DO NOT leave bills unpaid
Do you have any past dues? Try to clear them before applying for a home loan. Maybe there is an EMI you have defaulted on. Maybe you have missed a credit card payment. Clear of all these bills or you could risk your home loan approval.
These are some mistakes that prospective homebuyers make while applying for a home loan. Avoid these errors and you can have a smooth approval process. Once the loan has been approved, you will be one step closer to owning your dream home.