5 Tips You Should Consider To Get A Mortgage Loan Approved
There are numerous situations where you are need of a high-value personal loan but cannot afford the expensive rate of interest. Paying for the higher education of your child is one such scenario. The amount you are looking for may also not be available with an unsecured loan.
In such cases there is an option for the borrower is to apply for a mortgage loan. You can utilise the funds as per requirements. Also, you get to enjoy a lower rate of interest and longer tenures than an unsecured loan. NBFCs also disburse the funds within four days after approval.
However, you need to take care of a few points when you apply for a mortgage loan. Doing so ensures that your loan application is approved quickly.
Few Of Such Tips That You Should Consider:
Make Sure Your Property Is In An Ideal State
Your loan approval depends considerably on the condition of your property, since it is a secured loan.
Your house should fulfil the following criteria when you apply for a mortgage loan:
- Be within the serviceable area of the financial institution.
- Be in good condition – must not be age-old or under-maintained.
- Must not be a mortgage to any other secured loan.
Lenders will conduct a physical check to ensure that the property is satisfactory and meets all the eligibility criteria.
Arrange All The Required Documents
The mortgage loan process for approval is quick as the documentation procedure is uncomplicated.
You only have to provide the following few documents:
- Copy of your property documents.
- PAN or Aadhaar.
- Address proof (telephone bill, electricity bill, property tax receipt, life insurance policy, any KYC document with the permanent address, etc.)
- Bank account statement of the last three months.
- Income tax returns.
- Latest salary slips.
NBFCs like Bajaj Finserv send their representative to collect the above documents from your doorstep when you apply for a Loan Against Property.
Bajaj Finserv also brings you pre-approved offers that make the process less complicated and reduces the time to avail loans. Pre-approved offers are available on business loans, personal loans, secured loans like home loans, and a list of other financial products.
Apply For A Reasonable Amount
Ensure the amount you ask for does not make it risky for the lender to approve when you apply for a mortgage loan.
Financial institutions determine the risk through the loan to value. It is the ratio between the loan amount and the price of your property. loan to value can go up to 85% for loans more than Rs. 30 Lakh.
However, do note that a high loan to value makes your loan riskier. The lender may not be able to recover the outstanding amount if you default. A high loan to value is one of the many factors affecting your interest rate on loan against property. A lender may even deny your loan altogether.
Hence, apply for a loan amount that keeps the loan to value low. Your application will be approved quickly and you will also enjoy affordable interest rates.
Clear Your Existing Debt
It is advisable to clear your existing loans and credit card debts before you apply. Debts increase your debt-to-income ratio. Some lenders may check this ratio when you apply for a mortgage loan. A high debt-to-income ratio can become a problem for you to pay your new loan EMIs.
Improve your CIBIL Score
Your CIBIL score is not an essential eligibility criteria when you apply for a loan against property, since these loans are backed by an asset. However, a high credit score showcases your creditworthiness and makes you more eligible.
Your CIBIL score may already be good if you have paid all your previous debts (loans and credit card bills) in time.
Along with the above, ensure you satisfy the age criteria to fasten the loan against property process which is approx 25 and 70 years for self-employed while 33 and 58 years for salaried applicants. Compare the rate of interest and charges of a loan against property. Choose the lender with the most favourable terms.