The reduction in interest rates and charges over the last three years has made it easier to purchase your dream home using home loans. If you are planning to purchase a house in the New Year, you can easily apply for a home loan from a reputed financial institution. If you are a first-timer, a bit of research would not only make you eligible for a home loan but reveal some important things that you should be aware of.
There might be some impediments to your home loan processing that you can work around by learning about the application procedure. It is not difficult to meet the eligibility criteria set by the lending party. Any reputed bank or non-banking finance company like Clix Capital would examine a few things such as credit score, term of the loan, repayment capacity, income, etc. before they approve your home loan application.
- Improve Your Credit Score
When you apply for a housing loan, the home loan provider will go through your credit report and score to analyze your creditworthiness. An excellent credit score is a delight to any financial lender since it reduces the risk quotient. To reach that mark, you have to ensure that all your loans and credit card bills have been paid punctually. Any kind of delay or default can severely impact your credit score. Most lending institutions consider a credit score of 725 and above as excellent for loan approvals. Good credit scores also lead to lower home loan interest rates.
- Go for a Lengthy Loan Tenure
Home loan repayment is a lifelong pledge. To improve your home loan eligibility, try and apply for a longer duration home loan. It is important to note that a longer tenure home loan makes the EMI amount lower but increases your entire interest sum that has to be paid. So, facilitate a higher cost of applying for a home loan while opting for a lengthy repayment phase.
- Keep Your FOIR Below 30%
The FOIR or Fixed Obligation to Income Ratio is the ratio of your debts according to your income. It is also popularly known as the Debt-to-income ratio. Most lending institutions require your FOIR to be below 30% of the income that you’ll spend for your daily living. Usually while opting for a home loan, limit your FOIR up to 30% to increase your chances of getting a home loan quickly and easily.
- Opt for Joint Loans
One of the most prudent moves to increase the chances of getting a home loan is to apply for the loan with an earning family member. You can also add your spouse as a co-applicant. This will greatly improve your eligibility and get you added advantages such as lower interest rates, easy repayment methods, and flexible terms. Furthermore, co-borrowing also divides the EMI burden and gives you tax benefits.
- Show an Additional Income Source
An added source of income will surely increase your home loan eligibility. It can be a rental income source, a side business, or additional earning. This will add to your credibility and repayment ability while opting for a home loan. For example, if you have another home or an apartment, rent it out and that will give you an added source of income to prove your eligibility.
- Do not Change Your Job Frequently
If you are a salaried individual and planning to obtain a home loan, then avoid frequent job switches. Work in a company for two years continuously, otherwise your home loan eligibility will be impacted. Smart planning is required before presenting your application to the lender.
There are a few points you should be mindful of before deciding to purchase a home using a home loan. If you adhere to the mentioned guidelines, you can easily become qualified for a home loan. You should start the process first by checking your credit score with Clix Capital here.
Required Documents for a Home Loan
Most NBFCs these days have minimal documentation formalities that do not require several visits to the lender. However, you must check the lender’s documentation requirements and keep your documents updated before applying for a home loan. At Clix Capital, you need to have the following documents while submitting your application for easy approval.
- Filled online housing loan application
- Passport-sized photograph.
- Identity Proof- Aadhaar Card, Pan Card, or Government ID for government employees.
- Address Proof- Aadhaar Card, passport, voter ID, driving license, or utility bills for the last 2 months.
For Salaried Individuals:
- Last 3 months’ salary slip
- Last 6 months’ bank statements showing salary credit
- The latest copy of Form 16
For Self-employed Individuals:
- Business profile
- Last 6 months’ bank statements
- Last 2 years’ Income Tax Returns (ITR) & financials, including balance sheet, profit & loss accounts
Here’s What Clix Capital has to Offer!
Loans up to Rs 2 Crore: We guarantee that funds will never be an issue for you with our online home loan. After all, we do not want you to compromise on the home your heart desires.
Tenures up to 25 Years: Your loan tenure will never be an issue – choose a flexible tenure of anywhere up to 25 years to pay off the housing loan to the home loan provider.
Floating & Dual Interest Rates: Select either a floating interest rate or a fixed interest rate for the first 2-3 years, followed by a floating interest rate.
Simplified Documentation: Paperwork or complicated housing loan applications can understandably be daunting, but don’t fret – we at Clix Capital ensure that your documentation is as simple as it can be.
While looking for home loan providers in India, make sure you select the one that ticks all your desired checkboxes. Clix Capital offers home loans not only at the most competitive interest rates but with minimal paperwork and requirements. If you meet all our eligibility norms and paperwork, you are good to go with your loan application process and get the funds in just a few minutes.