No matter what the commercials say, getting a home loan in Gurgaon or any other city is not an easy task. It may seem like a walk in the park, however, it brings with it a myriad of hurdles that need to be resolved. Let’s take a look at a few obstacles:
1. Verification Process
There are plenty of home loan applications that get rejected in the verification process, leaving the borrowers thoroughly disappointed. But why do they get rejected? Lenders have a specific set of requirements, or eligibility criteria for home loan which help them to select their prospects. If you fail to meet a lender’s qualifications, there is a high probability your loan will not be approved. One way to ensure this doesn’t happen is to study the qualification criteria thoroughly and apply only if you meet the requirements.
2. Non-refundable processing fee
Banks and financial institutions charge a certain share of the loan in order to process the loan, this may vary from 0.25% to 1% of the loan amount, or at times even be a fixed amount. However, this fee is non-refundable, which implies that if the bank were to decline your loan for whatever reason it deems fit, the processing fee cannot be refunded. The institutions that promise that the processing fee is refundable may turn back on their word, so it’s imperative that you have that agreement documented in writing, so in case your loan is rejected, you only lose time in the bargain, and not your hard-earned money.
3. Lack of promise
The bank comes up with a margin on how much loan you are eligible for. This loan amount depends on a number of criteria such as borrower’s income stream, credit card usage, financial history, total years pending in employment and more. If you as a prospect fail to show promise, the lender can reject your loan request. To make sure you convince the lender that you can pay the loan amount in a fixed duration, you can try incorporating your family’s income and make them a co-borrower, provide LIC policies, and provident funds as collateral, and many more things to persuade the lender.
4. Interest Rate options
For banks every borrower is a potential client, and they are here to do business. A bank will always look out for profit in each and every prospect they collaborate with, so be vigilant while you compare home loan rates, as there might be a catch. Studying the terms and conditions thoroughly, and having a good external unbiased loan advisor can benefit you greatly in making sure you get the best interest rates. Diminishing interest rates are definitely better, however the bank always has something up their sleeve, so make sure you analyze and calculate the total interest you’ll be paying in detail in order to make a smart decision.
Now you are aware of some of the obstacles you may come across while applying for a home loan. So, no matter which city you are in, whether you are applying for a home loan in Noida, or Delhi, make sure you’re prepared for the obstacles a lender will throw at you.