Real Estate

A Complete Guide for Home Loan Application

Flora Harvey

Are you concerned about your home loan application being rejected? Millions of people use home loans to finance their dream homes. It’s natural to worry about the outcome.

So, what are the essential features of a home loan application, and how can one get them right? 

Well, as you shop for the lowest home loan interest rates, you may come across different home loan products. For most of them, basic eligibility criteria are, by and large, the same.

For example, you need to be at least 21 years while applying and not older than 70 during loan maturity.

Read on to understand the process of applying for a home loan and the factors you should know. 

Factors That Affect Home Loan

Credit Score for Home Loan

Credit scores are a number that determines your creditworthiness. It tells the lender whether you will be able to pay back the loan along with interest as per the timeline. 

It also indicates the risks involved in lending money, as reflected in low credit scores. Given this, you should aim to have a higher credit score.

You must pay your loans and credit cards on time in a disciplined manner. If you default on your credit payments, your credit history is dented, and the score drops. 

For a home loan, PNB Housing asks for a minimum credit score of 611. If you don’t have this score, you should better wait and improve the score before you make the home loan application. 

Monthly Income 

Your income per month can play a big role in determining whether the home loan is an option for you. 

The reason is straightforward. As soon as you begin to repay the loan, your EMI could claim a significant portion of your earnings. 

You should be able to cover your expenses using the remainder of your income. Most lenders are willing to approve loans that are around 60 times your monthly income.

PNB Housing loans are available to applicants with a minimum monthly income of Rs 15,000. 

Your final approved loan amount will be contingent on other factors, including your credit score and the price of the home you’re planning to purchase.

Note that you will also need to have been employed for three or more years to qualify.

Documents Required

You will need the following documents: 

  • Home Loan Application 
  • Residence Proof
  • Income Proof 
  • Age Proof 
  • Education Qualifications 
  • Property documents (title, the approved plan, etc.)

Home Loan Application Process 

The home loan process is a lengthy one, and it may test your patience. However, if you’re well organized in terms of papers and can wait for the due course, it can get approved without stress. 

Here are the home loan application processes: 

Pre-Assessment

Check out your credit score, verify your eligibility, select the home you’d like to purchase, look for the lowest home loan interest rates, and then choose the lender.

Collecting Documents

After you’ve selected your lender and the type of home loan you’re seeking, you will receive the list of documents the lender needs.

You will need the following documents: KYC documents, pay slips, salary slips, ITR certificates, and bank statements.

Submit the Application 

Once all documents are ready, you can complete the application form online or offline and attach the documents. Once all the details and documents are properly in place, you can submit the form. 

But before applying for a home loan, you should consider whether you want to go for it because it’s a long-term financial commitment.

Approval Process

The lender will consider your application, and if it’s approved, a sanction note which outlines the conditions of the loan, such as EMI duration, tenure, interest, and so on, will be given to you. 

If everything appears in order, you can accept the terms as is or if you don’t like the terms, you can negotiate or search for alternative lenders.

Loan Disbursement 

The loan amount will automatically be credited to your account if you accept the sanction note.

In Conclusion

After you’ve obtained the loan and bought a house, the payment process begins with EMIs. Thus, getting a home loan could be easier if equipped with the information above and thoughtful planning.

Also Read: 3 Mistakes To Avoid Any Interruption In Availing Loan Against Property