Factors that Decide the Authority of Any Lender for Home Loan


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The Indian real estate market is at a low point, and it is seemingly the best time to accomplish your dream to own your own home.

However, the task doesn’t end here alone. With the lending process getting stricter and super scrutinized, it has got a lot more difficult to avail a home loan.

Having said so, it isn’t an impossible task to accomplish either.

Let us help you with five factors that contribute to making your entire home loan application and approval journey smoother, as well help to find the best home loan in all manners.

  • The Down Payment

Gone are the days when developers demanded 20% of the home cost as down payment. With changing times, the rules have changed as well. For instance, today developers are good with even 1% of the home cost as down payment. So you needn’t immediately strike off your dream for this one factor alone. However, if you can, always try to put across a hefty down payment amount. It will help you look for a lower home loan amount; therefore, lowering your EMI cost.

  • Job History
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The accumulation of down payment is crucial to the lenders. But what is even more critical is your ability to pay off the debt. It can be displayed only through your job status. Banks and lenders understand that the job market is fiscal. However, it is vital for them to go through a thorough background check concerning your job history. Your stability in job provides the bank or lenders with the assurance of repayment of debts in the future.

  • Paperwork

In older days, the mortgage would get approved with less to no paperwork. However, times have changed now, with paperwork getting significantly crucial. Banks and lenders in your home loan application process want your documents to do the talking. The documents are expected to be well streamlined and self-sufficient to make the entire home loan approval process a smooth affair.

  • Debt Load

An extension of your capabilities to repay the home loan comes with a background check on other debts. Bank or lenders want to know if you are entitled to any other debts other than the house loan you are applying for. On an average, the bank doesn’t expect your entire debt repayment amount to exceed 50% of your total monthly income. Therefore, it is essential to keep a check on your credit card bills. Also, thoughtful planning with essential finances such as health insurance and education loan is required. However, sizeable assets in the form of a hefty savings account, funds, insurances, retirement plan can be used to cover up the shortcomings.

  • Credit Score
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When you enter the world of housing loans, the first parameter that speaks volumes about you is the Credit Score. Banks or other lenders expect the Credit Score to be 750+ out of 900 to grant you the loan. A Credit Score below 500 isn’t a favourable figure in the home loan applying process. Also, your CIBIL score takes a huge part in defining the housing loan rates that will be finally awarded to you by a lender.  The Bottom Line

The home buying market has become favourable, but the home loan approval has got stricter. However, it isn’t an impossible task to get you the desired offer.

All that you are expected to do is check some crucial parameters that the banks and lenders judge you upon. Once the necessary tweaks and rectifications are made, your dream home is just a home loan approval away.

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