Buying a home can be an exciting experience for many homeowners, and taking a home loan is an essential prerequisite to meet the costs of buying a house. If you think about it, picking the right home loan is just as significant as finding the right home.

Home loans involve a large sum of money. The applications are permitted only after much consideration. This process is lengthy because the bank needs to confirm that there are no debts and the borrower can repay them on time. A simple error or a small miss can result in a home loan application being rejected. If you dream of owning a home and are in the process of drafting a home loan application, here are few tips for getting it approved for a mortgage:

Maintain a good credit score

Most lenders check your credit score before approving the home loan. Checking your score tells the lender how upright you are with your investments, previous loan dues and how much of the new loan you can pay. The finest deals on home loans are given to those with excellent credit scores. A good credit score promises the lender that the borrower is accountable enough to pay the amount back. To maintain a good credit score, you need to have a clean financial record. Make sure you clear your outstanding debts and all your credit cards are paid in time.

Start saving enough for a down payment

Planning your financials is crucial when you are in the process of buying your own house. Depending on your mortgagee and the type of loan you plan to choose, your required down payment can range from 2.5% to 20%. Establishing a monthly budget will help to put away enough money for the down payment. After assessing the amount, your budget can support, consider depositing a fixed amount in your account every month to save for the home. If your budget does not allow you to put down a large sum of money as a down payment, go for zero down payment loans. These are ideal for homebuyers who can afford to pay a small sum as a down payment.

Get your financial records ready

When you apply for a loan, you will need to give your lender many financial records. Having these credentials in order will aid with the speed of processing. Here is the list of documents required:

  • Loan application form
  • Identity proof
  • Residence proof
  • Bank account statement/ Passbook for the last 6-8 months
  • Signature verification by the bankers of the applicant
  • Liability statement and owning of assets
  • Detailed property documents
  • Original salary certificate from the employer (salaried professionals)
  • IT returns for the past two financial years (self-employed professionals)
  • Proof of advance income tax payment (self-employed professionals & self-employed businessmen)
  • Proof of business address (self-employed professionals)
  • Assessment order copies of the last 3-4 years (self-employed businessmen)

Keeping the above home loan tips in mind will help you make a calculated decision regarding a home loan and get your home loan approved on time. You must disclose all the information necessary and relevant to your application throughout the home loan application procedure. Be honest about the details you are about to submit to avoid rejection of a home loan.