Skip to main content

What Banks consider while Reviewing Home Loan Application

 

Svetlana Verma, a Mumbai-based chartered accountant, had found her dream house. It was in the desired location and priced right. Svetlana was looking at financing the buy with a home loan and personal savings. The 30-year old received promotional calls regularly from her bank to avail of a home loan. She decided to approach the bank to get the loan. But, to Svetlana's dismay, the bank rejected her application.


Let's understand what banks look at before approving your loan.


Credit history: Banks use credit score to determine your credibility. It is the most important factor used for reviewing your loan application. A credit score reflects how you treat your financial transactions. Credit-rating companies like CIBIL keep a record of payment (or non-payment) of your bills and EMIs. Delayed payments also impact your credit score. If you have a lower credit score, your loan application is likely to be rejected. Hence, it is crucial to maintain a high credit score by paying off your debt in time.


Income source: Banks need to know how you would manage your loan repayment. Hence, your disposable income is what matters to the bank. If you are stretching too much, you have a high possibility of default on loan repayment. Your income is also important to determine your loan amount eligibility. If you have applied for a joint loan, your spouse's income will also be considered.


Profession and Experience: Banks prefer applicants with a stable and secure job. Hence, government and PSU employees have a higher like lihood to get loans. Engineers, doctors, lawyers follow. Self-employed are the least preferred because they have a fluctuating income. How long you have been working with the company is important too. Thus, your employment history is important for your loan approval.


Existing loans: Your loan application is also affected if you have any previous loans to be repaid. A new EMI to your previous debt is likely to affect your repayment capacity. But a good credit score and proof of likelihood of a higher income can improve the chances of approval.


Age: The younger you are, higher are the chances of loan approval. People in the age group of 25-40 years have enough time in hand to earn and repay the loan. Hence, banks consider them as a safe. Applicants above 60 years are risky for the banks.


Location: Some localities do not have the clearances from government bodies and other institutions. A loan application for a property in such premises is likely to get rejected. Also, banks do not prefer to fund a property located outside city boundaries. A house within city limits or in a prominent locality is preferred.


Readiness: How soon you can get the possession affects the loan approval decision. Banks prefer a ready house over under-construction properties. Chances of delayed completion or non- completion are high in case of the latter. Hence, builder's credibility and proposed completion time matter in such cases.


Always remember to consider these points when applying for a home loan. Over past few years, the approvals have become easier to get. This is mainly to promote investments in real estate. But do not expect banks to be lenient while scrutinizing your application. Be careful about the decisions you make, so as not to compromise your loan eligibility.








------------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

--------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

---------------------------------------------

 

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Impact of Demonetisation

The government's move to demonetise `500 and `1,000 currency notes will immediately impact reserve money and money supply in the system along with the balance sheet of the Reserve Bank of India, the sole authority in the country for accepting currency notes and coins as legal tender. ET explains the interplay of currency, reserve money and money supply. 1. What is currency in circulation? It is the total value of currency (coins and paper currency) that has ever been issued by the central bank minus the amount that has been withdrawn by it. Currency in circulation comprises currency notes and coins with the public and cash in hand with banks. It is a major liability component of a central bank's balance sheet. 2. What is reserve money? It is essentially the central bank's money . It is also called high-powered money , base money and central bank money . As per the definition, reserve money equals currency in circulation plus bankers' deposits

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Reminder from Income Tax Department for Income Tax Return Filing

The income tax department has sent out emails to tax payers reminding them to   e-file income tax returns for income earned in FY 2015-16 (assessment year AY 2016-17). The due date for submission of tax returns for FY 2015-16 is 31 st   July 2016. The following email has been sent- Dear Taxpayer, By this time last year, you may have had already electronically filed your Income Tax Return. This is a gentle reminder for you to file your Income Tax Return for Assessment Year 2016-17. E-filing is simple, easy and convenient as you would have experienced in the last year. You are requested to login to  https:// incometaxindiaefiling.gov.in   and download the free return preparation software with a host of new features to help you in preparing the Income Tax return and submit your return. You can also prepare and submit ITR1 and ITR4S online. Please take some time to browse through all the value -added services offered on the E-filing website that will help you prepare your return accurat
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now