Getting housing loan is stressful most especially if you do not know the first step. There are many borrowers who is denied because they do not prepare and they do not know the process.
Here are some steps to maximize your chances:
1. Assess your financial capacity
The lenders usually ask about your assets, monthly income, liabilities and projected down payment. They assess your income, credit history and debt service ratio.
2. Clear your credit history
As borrower, you should review your credit history before submitting a house loan application. Banks and other lenders are usually share information on delinquent or non-paying borrowers and history of non-payment is a big red flag for lenders. You should first clear your credit history by paying bills on time, paid credit card balances and if you have unpaid load be sure not to mess up your credit during the loan processing as diligent lenders.
3. Check with mortgage calculator
Mortgage calculator will calculate your monthly mortgage payment under different housing amount, interest rate, loan tenure, and annual income scenarios. In this case, you will be able to decide what finances can handle the payment scheme.
4. Analyze your finances
Find out what you can spend before bidding on properties. Make sure that your house loan will be suited to your finances because if not, it will cause you a lot of emotional and financial stress in the future.
5. Maintain stability
Lenders prevent risky clients so it is necessary to become financially stable at the time of your house loan process. It is essential that you maintain a stable cash flow and avoid new debt. Also, try to stick with your employer because taking a lower-paying job or quitting to become self-employed is another red flag for lenders.
6. Increase your savings account
Lenders will check your savings account if you have enough money to pay off a various cash expenses such as down payment, home appraisal, loan processing fee and so on. Having a zero cash is a quick way to disapprove your housing loan application.
7. Prepare necessary documents
Make sure that all documents needed are prepared including recent ID, proof of income, employment certification, ITR, payslips and other pertinent collateral documents. Lenders needs evidences of what you have to say.