In case you are like most individuals, purchasing a home may be one of the major financial decisions that you may make in your life. And for most individuals, availing of a home loan is a prudent way to afford the dream home of your choice. Opting for a home loan, may it be from a public or private sector bank or HFC like Sundaram home finance or Mahindra home finance, is a time-consuming process. There are, unfortunately, several roadblocks or hurdles along the way.
Here in this blog, discussed are the common issues that you, as a borrower, may face. These concerns might range anywhere between being turned down and offer unable to get the desired loan proceeds. Also mentioned are the tips on how you can overcome the issues. So, if you are giving thought to purchasing a home, make sure to read this –
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Online advertisement vs real estate agents
When it comes to home loans, there are majorly 2 sources of information – real estate agents and online advertisements. While real estate agents offer you an in-person consultation and guidance for home loan procedures, online advertisements are more easily accessible than traditional real estate agents. However, online advertisements may be misleading and do not all the time reveal the whole story linked with home loans. Here’s where real estate agents may come in handy. With a real estate agent’s assistance, you can better understand your loan choices and show an accurate picture of what’s available in the market currently.
Real estate agents aggressively work hard to constantly keep track of all distinct kinds of loans available and may assist you in finding out what will match your financial requirements the best. Not just do the real estate agents are aware of the home loan, but they even hold extensive knowledge regarding the aspects like down payment and home purchasing procedures.
So, which one is a better choice? The answer here is it depends on your requirements and preferences. If you are someone looking for personal guidance and interaction, then you may opt for real estate agents. However, if you are looking to conduct your own in-depth research, you may go the online advertisement route.
Additional Reading: Mahindra home finance
Rejection at the initial stage
One of the most crucial issues witnessed by you as a home loan borrower is a rejection at the initial stage. It might be owing to the age limit or the, financial needs, or the required papers or documents that are not submitted during field investigation by the HFCs or banks or others. They are rejected instantly as your qualification of you as a borrower fails to match with the lender.
The simplest approach to avoid being turned down a home loan offer is double checking with the preferred lender to know if you meet its eligibility criteria or standards. Before placing an application, ensure to discuss with the lending professional or advisor to know if you qualify for the home loan deal.
Maintaining appropriate documentation and providing the correct and verifiable details to the lenders may help you to pass through the basic authentication process. If you follow certain tips, you may enhance your chances of availing of a home loan application approval. Note that it is always best to use online home loan eligibility to understand which lenders may be willing to offer you the home loan based on your eligibility, income, credit score, past repayment record, etc.
The processing charge was not refunded
When you place an application for a home loan, then up-front processing charges are one of the important expenditures you must bear. Ensure that this charge is nonrefundable in nature. Thus, be thoroughly cautious when finishing the loan application so that you do not require paying this charge again and again. Authenticate the documents thoroughly, and if you are not sure about anything, ensure to ask your loan advisor to get clarification. An inaccurate or incomplete application may result in processing charges being incurred several times, so ensure to take your time when filling out the home loan application form. Doing so will help you to fill out your application form correctly.
Ensure to also read the important terms and conditions linked with the home loan agreement thoroughly before you sign it. Doing this will assist you in avoiding any form of surprise later.
Desired loan proceeds not sanctioned
The next issue that home loan borrowers may witness is not availing of the desired loan proceeds. This might be owing to numerous reasons like insufficient income, lower technical property value, low repayment track and other outstanding loan proceeds, etc. To enhance your loan approval chances, it is vital that you provide thorough and accurate details about your lender. Also, ensure to maintain updated documents so that the verification procedure is smooth.
Interest rate dilemma
One of the crucial parameters that you, as a home loan borrower, must consider is the rate of interest. This may have a considerable impact on your agreement for a home loan. So, it is crucial that you are aware of all distinct rates of interest available in the market today. Determining whether to avail of a home loan with a floating rate or a fixed rate is a question that mostly every homeowner must ask.
You must also consult with your financial professional or advisor to understand how changes in the rate of interest will impact your monthly payment and overall home loan cost. This can assist you in making an informed decision regarding which rate of interest is prudent for you, whether – fixed or floating.
Also, it is necessary to note that the rate of interest differs from time to time. Thus, stay aware of the latest rates before you place an application for a home loan.
The difference in the valuation of the property
Property valuation is the major factor during the home loan appraisal procedure. Banks and HFCs can reduce the sanctioned loan amount depending on the property value. Property valuation is nothing but the procedure of deciding the property’s worth depending on various variables like property age, its condition, construction quality, its location, whether it has been unapproved or approved, etc. HFCs and banks consider such parameters when evaluating the property, and they just lend you the amount as per their estimate. This may result in a considerable disconnect between what the bank and you expect from the offer.
To avoid this specific situation, ensure that you stay updated about the property value before you place an application for a home loan by approaching a valuator approved by HFCs and banks. This may save you from any discomfort in the future.
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