Purchasing a home is a dream and an emotional and financial asset. Home loans provide you with the requisite financial capital to make your dreams turn into reality. But for home loan approval, you must meet the eligibility requirements and other loan provider terms and conditions. You should submit the relevant documents to apply for an online home loan. In addition, your credit scores should be high, and you should have a stellar credit history to qualify for low home loan rates.
Sometimes, applying for home loans online can be overwhelming, but worry not, the article will guide you through the dos and don’ts of applying for an online home loan.
Dos When Applying for a Home Loan Online
The dos to apply for an online home loan are as follows:
Check Your Credit Score
Before applying for an online home loan, check your credit score. Although 750+ scores are preferable by lenders, the closer your score is to 900, the better it is. Every lender analyses your credit score before approving your home loan application. So, if you are looking for a loan, check your credit score first. If your credit score is less than required, improve it to get reasonable home loan rates.
Select an Affordable Home Loan
Due to the effortless home loan availability and competitive offers, borrowers get mesmerized while applying for home loans online. They borrow more money than they can afford and pay large EMIs, which stresses their budget and finances. Hence, use a home loan EMI calculator to find the EMI amount you can afford and apply for that home loan plan.
Since home loans are long-term commitments, you will likely pay EMIs for around 20 to 30 years. Therefore, you should select the right lender offering the best home loan deals. You can research and compare home loan deals from various lenders. Visit lenders’ official websites and compare. You can compare the home loan rates, associated charges, eligibility requirements, and prepayment conditions and select the best after researching and comparing.
Fill Up the Online Application Accurately
While applying for an online home loan, ensure to fill up the application accurately. Failing to provide essential information like income sources, existing debts, etc., can delay your approval process and even result in rejection. Ensure that the mentioned details are accurate, and do not fudge them because the lender will surely identify them. Providing inaccurate information can lead to delay or rejection.
Save for a Larger Down Payment
The downpayment is the amount you pay for your home. Home loans provide only 80 to 90% of the purchasing cost. You have to pay the rest of the amount. You decrease the lender’s risk if you pay a larger down payment than required. It boosts your credibility and increases your approval chances. So, try to save money for a larger down payment.
Don’t When Applying for a Home Loan Online
The don’ts when applying for an online home loan are as follows:
Don’t Select Long Tenure
Although home loans are available for a maximum term of 30 years, it is advisable to wrap up the loan quickly. The longer the repayment duration, the larger the outflow. Opt for a short tenure with affordable EMIs to decrease the loan burden. Use a home loan calculator to calculate the EMIs, home loan rates, and tenure, and select the EMIs that work for your budget.
Don’t Ignore Fine Print
It is among the most common mistakes the majority of borrowers make. Meticulously read the loan documents and familiarise yourself with the loan terms and conditions, such as foreclosure charges, downpayment, prepayment, late penalties, processing fees, etc. You can contact the loan officer or consult a financial consultant to understand the fine print. Sign on the dotted line after understanding the clauses.
Don’t Resign from Your Job Before Applying for a Loan
Before applying for an online home loan, don’t quit your job. Lenders prefer borrowers with stable jobs and income. Your income and employment are vital in determining your eligibility and whether lenders should approve or reject your application. Quitting or switching jobs right before applying for a loan can result in rejection. Therefore, if you plan to buy a home in the coming jobs, staying in your current job is advisable.
Don’t Apply for Other Loans or Credit Cards
Remember that lenders evaluate your credit history before approving your application for a home loan. Applying for other loans or opening a new credit card account hikes your debt burden, which alerts lenders and makes them cautious. So, not applying for credit cards or other loans before applying for a home loan online is good.
Don’t hesitate to Apply for Joint Home Loans
Applying for a home loan online with a co-applicant is a good idea. It boosts your approval chances if your co-applicant has a good credit score and is an earning family member. In addition, including a female family member as your co-applicant can fetch you concessional home loan rates.
Applying for an online home loan can be stressful. Since multiple loan providers are in the market, selecting the best one can take time and effort. While applying for home loans online, knowing what to do and not to do is vital to make the loan procedure run smoothly. Following the ten dos and don’ts specified above boosts your chances of getting a loan at the best home loan rates and quickly. You can bookmark the page and check the dos and don’ts while applying for a home loan.