Often, the process of applying for a home loan is time-consuming since it is a big ticket loan, and the bank has to evaluate a lot of things. Usually, lenders assess borrower profiles by taking into account the parameters like credit score, income, job stability, and loan amount eligibility, among others. There are some of the reasons your home loan processing may take days or even a month. But there are ways you can shorten the span of home loan approval. Let’s get to know how:
- Keeping your credit score healthy:
This is one of the most crucial factors that for approval assessment. So, if you have a poor credit score due to delayed payments or pending debts, you can start making changes in your finances. For instance, if you already have a loan with a bank, it is necessary to repay the loan EMIs on time rather than delaying them. Due to this reason, your credit score gets affected. If you take steps to improve your credit score by maintaining a proper repayment cycle, then your credit history will not cause any hindrance in the home loan approval.
- Having the right documents in place:
If you apply with a lender, you will have to provide documents that are necessary for verification. Typically, a home loan requires key paperwork, including identity proof, address proof, Income statement, and Income Tax Returns. You will also be required to submit property documents whether you are purchasing a new unit or a resale property. For a new unit, you will be required to submit the builder agreement and essential approvals along with the home loan application. If it’s a resale property, documentation will include a sale deed, a chain of ownership, a society membership certificate, and previous loan documents, if any. In most cases, developers tie up with banks to speed up the lending process. This is beneficial for all parties concerned.
- Making a significant down payment:
You may be aware that lenders approve 80%-90% of the home loan amount for any property. Borrowers are required to pay at least 20% in cash as a down payment. For faster home loan approval, you can make a maximum down payment which will help to reduce the cost of borrowing. If you have applied for a lower loan amount, the lender will sanction the loan in a shorter span of time. So, in order to reduce the approval time, you can try going for a higher down payment.
- Choosing the right lender:
One cannot apply for a home loan with any lender. It is necessary to compare the home loan interest rates & other benefits offered by the lender so that your home loan journey is stress-free. If you have a long association with a particular lender, you can also be eligible for a pre-approved home loan offer. Generally, pre-approved offers are given to a set of existing customers who are entitled after assessing their credit history, income, and other factors. Unlike the standard home loan approval process, the paperwork is minimal to zero, the interest rates are attractive, and the turnaround time is quick.
The bottom line:
So, these are some of the pointers you should work upon before applying for a home loan with any lender. Even slight negligence can lead to the rejection of the loan application. Hence, ensure that you have everything in place that will successfully help to reduce the home loan approval time.