Like any other huge financial commitment, availing of a home loan too must be done with sheer diligence. A housing loan in India is compulsory in your journey to owning your own house, and even the tiniest miss could cost you the funding to make your dream home come true.
Even though the things an aspiring home loan borrower needs to remember and check before availing of a home loan are not too difficult, a home loan applicant must be meticulous while putting together the information they are required to provide. To make the run to your housing loan application as seamless as it can be, we’ve prepared an easy-to-follow checklist for home loan aspirants. Once you have browsed through this, your chances of enjoying a hassle-free home loan borrowing experience will multiply.
A Housing Loan Checklist for Aspiring Homebuyers
Possessing necessary information on the home loan or the lending institution you have been eyeing will help prepare for your home loan application better. Knowing what you desire will also help avoid making too many simultaneous applications to other lenders, as that can also hamper your credit score.
Housing Loan Interest Rate
The home loan interest rate is the make or break factor for any home loan – this factor alone can decide how much the house-buying decision is likely to cost you in the long run. Servicing a home loan in India is a long-term financial commitment. Therefore, always remember that if you do not end up getting the most suitable home loan interest rate, the repayment will become a burden on your personal finances. This is why it is always important to avail of any loan, including a home loan, at a rate that best suits your financial position.
Before you decide to approach a lender, make use of an online housing loan EMI calculator to get an idea of the possible EMI outgo. It will show how much you are required to pay every month, based on the interest rate you select. If you have a commendable credit profile and meet the lender’s housing loan eligibility requirements, never hesitate or think twice before negotiating or fighting to get a better home loan offer, to make sure that you can achieve the maximum savings possible on the credit tool.
Documentation for Home Loan
We have made a list of the documents lenders typically ask from home loan applicants, so you can have everything in place ahead of time – saving you time when you apply.
| Category | Documents required | |
| Any ID proof | PAN, Passport, Voter’s ID, and Driving License | |
| Any address proof | PAN, Voter’s ID, Passport, Electricity/Telephone/Water Bill, and Driving License | |
| Others | Passport-size photographs, proof of business continuity for five years (for self-employed borrowers) |
Income Proof
| Individual | Documents required |
| Salaried and self-employed home loan borrowers | Form 16, most recent salary slips, or ITR
Bank statements covering the previous six months |
Associated Charges
Nobody likes to pay surprise surcharges on a big-ticket expense, but home loans have a wide variety of additional costs that are linked to them. Read up on your home loan lender’s policies before approaching them, so you have a fair idea of how much you’ll need to shell out upfront. While most lenders do not levy a penalty on prepayment of housing loan foreclosure, you must double-check what foreclosing the home loan can cost you – as it may be chalked up to a sizeable amount, if they do.
Credit Profile
A borrower’s credit profile dictates the course of your home loan journey. If you have a credit score that exceeds 750, we predict a seamless borrowing experience wherein you’ll be able to satisfy the lender’s eligibility criteria and also qualify for the home loan amount you desire. However, if your credit profile is not up to the mark, lenders may have their own set of reservations about approving a home loan with low interest to you, as it puts your home loan repayment capacity under stringent examination.
Your outstanding debts, loan repayment history, existing financial obligations, and credit patterns impact a credit profile. These give your lender an idea of how you may behave as a home loan borrower. Check your credit score before you apply and do all that you can to increase it to maximize your chances of home loan approval.
Pre-approved Home Loan Offers
Being armed with a pre-approved housing loan offer can empower you to negotiate a lucrative deal with your developer. It reflects that you are a reliable buyer who has arranged the funds needed for the property.
Lenders extend pre-approved offers after they have evaluated an individual’s home loan application against their income as well as eligibility criteria. If your home loan application satisfies their criteria, the home loan lender will make a pre-approved offer that is likely to reduce the loan processing time. Faster approval means faster relief. It will also provide more clarity on the home-buying budget you must consider. Once the home loan is approved, you can immediately start shortlisting the properties that fit the budget. Once you have zeroed in on the house you desire to purchase, the only things that would be still pending would be a thorough assessment by your chosen lending institution and legal verification of that property, post the completion of which your home loan amount will be disbursed into the bank account.
Parting Thoughts
Now that you are well aware of a home loan borrower’s checklist and the housing loan process, apply your judgment to zero in on which lending institution would you prefer to borrow from. Some non-banking financial institutions, such as Bajaj Housing Finance Limited, provide home loan offers that are worth noting. They provide competitive home loan interest rates and a sizeable loan sanction that can go up to Rs.5 crore, based on eligibility. These lenders also offer a significantly long tenor of up to 30 years, basis the borrower’s eligibility. So, do your research thoroughly before you make a move.
Read More: Disability Income Insurance
