The objective of this article is to ensure that your home loan becomes a hassle-free experience through Loanyantra. Getting a home loan is a lengthy procedure. However simple it might look in the bank’s advertisement, the fact remains that there are a lot of hiccups in the entire process. Here are the 7 most common problems faced by home loan borrowers in India. Each problem is discussed in detail and appropriate case studies are mentioned along with it.
1. Rejection at the first stage
Strange but true, many of the home loan applications do not pass even the first test. They are out rightly rejected due to incompatibility between the borrower’s qualifications and lenders requirements. It could be the age criteria, income criteria, proper documents not being submitted, the bank not being able to verify your details properly, not passing the field investigations conducted by the bank and many more. The best way to avoid being rejected in this way is to check the eligibility requirements of lending banks carefully and apply only to that bank which matches your profile. Keeping proper documents ready and providing accurate, verifiable details to the banks will ensure that you sail through the preliminary verification process.
Loanyantra is an online platform to know about all banks in one click and to know if you are eligible for how many lenders’ requirement through filling a form or talking to our expert (040-71011991) and hence, helps you in decision making about the toughest step.
5. Difference in property valuation
The bank has its own experts for legal, technical and financial appraisal of the property in question. It evaluates the property on its own established parameters and assigns a value to it. This value can be significantly lower than the price you quoted for the property. Thus the bank will only lend you up to the amount it valued. This can cause a significant gap between what you need and what the bank is willing to lend. To avoid this situation the borrower can get the property valued before applying for home loan from a bank approved valuator.
Loanyantra’s Tip – Pre-approved home loans are the best solution if you are in a dilemma about the loan amount. Or sometimes, though the documents are perfect, if the loan amount needed is more than 75% or 80%, it is necessary to shift the kind of lender you look for. Usually, public banks offer lesser value than the financial institutes and private banks. The interest rate offered by the financial institutes is leaving the public and private banks in tough competition.
6. The down payment
Banks require the borrower to fund at least 10% to 20% (varying from bank to bank) of the entire loan amount as the down payment for the home loan. This amount has to be deposited before the disbursal of the home loan. In the absence of such down payment the bank will refuse home loan to the borrower. For a home loan of 10 lacs this could mean anything between 1 to 2 lacs. This amount must be readily available with the borrower. In a scenario where the valuation of the property by bank is considerably lower than the market price of the property, the balance will also have to be paid by the borrower. This effectively increases the down payment. The obvious remedy to this tricky situation is to get the property valued beforehand and have the down payment ready. Some banks also allow NSC’s, provident funds, LIC policies etc for down payment. It is generally a good procedure to check the down payment requirement of various banks and choose the one which requires the lowest amount to be deposited initially or fits your budget well.
Loanyantra’s Tip – Let us know if the down payment you can pay is a way lesser than actually needed. If your credit history is good and if you have good documentation, Loanyantra is a reliable source for a solution to get loan from top lenders in India. Only thing you need to do is compromise on the dream lender. However, while you are in home loan, Loanyantra can help you get loan in your favourite bank at lower interest rate.
- Title deeds and NOC Documentation Problems
The title deeds and NOC documents have to be furnished in the bank’s format. Borrowers who don’t provide such documents in proper format, will ruin the entire exercise and won’t get any home loan. To avoid falling into such uncomfortable situation, enquire about all the documents required by banks beforehand and take necessary steps to get them ready within the stipulated time frame.
Loanyantra’s Tip – Before our executive comes to collect the documents to you, we make sure, you have all of them in place exactly what the lender needs.
Buying a home is one of the major decisions a person has to take during his life. It is rare to find someone who pays the entire cost of home at one go. A home loan is an essential part of any home buying endeavor. Taking a home loan is a long journey, which involves many stages. The key to getting your home loan in a smooth way is being familiar with the entire home loan process.