While securing a home loan may not be a daunting task, it certainly is no cakewalk. And, after all the hard work you have put in to secure the loan, you would not want your bank to refuse you the services, citing reasons you thought did not matter.
This is why before you plan to go to banks for a home loan, there are many dos and don'ts you have to follow.
Dos and Don'ts
Avoid job hopping
A loan grant is all about money and your stable job and a regular income are the foremost factors that decide your loan eligibility and credit worthiness. So, refrain from job hopping, if you have applied for a home loan, even if the opportunity seems bright. Remember, as part of the loan appraisal process, your lender will confirm your job stability from your employer and any frequent job changes would score negative. Your application can stand rejected if you have changed your job often within a period of one year.
Avoid residence hopping, too
You may not have given it much thought but changing your residential address while you have applied for a home loan may impact your chances in a negative way. All the important documents and written communication would be delivered at the address that you may have mentioned in the application form. The same address will be verified by an outsourced agency of the lender, too. The report thus generated on the basis of agency's visit has to be positive for the loan to get sanctioned.
No more credit, please
An applicant must avoid taking any other loan or credit while applying for a home loan. Apart from the very fact that it will increase your monthly burden, one more credit means lower eligibility for home loan. In calculation of your home loan eligibility, your running loans are also taken in to account. Even if you apply or avail of a loan/ credit after you have applied for a home loan, the same will be reported in your credit report and hence, reach the lender.
Long and clean credit history is good
A long and clear credit history actually helps your lender have a better idea about your repayment behavior and credit worthiness and can improve your chances of securing a loan. This is why closing one of your old credit card accounts, especially if it has a clean repayment track record, may be a silly decision.
A cheque bounce is a financial offence. It can have a negative impact on your home loan application, especially if your processing fee cheque gets bounced. An applicant must ensure that he maintains minimum average balance or sufficient amount in his bank account and irregular or unusual bank transactions must be avoided.
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