Preparing for a Meeting with a Banker Before Applying for a Home Loan

Applying for a Home Loan can be a herculean task for the simple reason that there are several factors that both, the lender as well as the borrower, have to consider before sealing the deal.

Therefore, it is necessary for you to be well prepared for a meeting with your banker before you apply for the Home Loan.

Here are some important things you should ask your banker when you meet them for the first time:

1. Am I eligible for the loan?

The first question that you should ask is whether you qualify for the housing loan or not. Your banker will calculate your credit score and review your financial statements to give you an answer. While most bankers grant loans easily so that they don’t lose their customers, they can still reject your application if you have a bad credit history. In addition to a good credit history (650 or above), you must meet fall in the required age and income bracket as per their eligibility criteria. Also, the property-to-be-purchased and its location must be approved by the lender.

2. How much loan amount you can get?

Ask your lender about how much amount you will be able to borrow. In this case, banks evaluate your home that you are going to purchase and lend only a percentage of the value. Thus, it is important to know the amount you can get, given the value of your property. Banks may provide a Loan-to-Value (LTV) of up to 90% (depending on property’s value, loan amount, and your income) to fund your property purchase. The rest of the amount (also known as cash down payment) has to be arranged by you and must be paid upfront.

3. What is the repayment schedule?

Make sure you ask about the longest housing loan tenure you are eligible for. If you earn good, choose shorter tenure and higher EMI. If you want to keep your EMI amount small, opt for a longer tenure. The tenure for Home Loans can be up to 30 years, depending on your age, loan amount, and other eligibility factors.

4. What are all documents required to apply for the loan?

It is extremely important to have all the required documents ready before applying for the loan. The absence of a single relevant document can affect your application adversely. Documentation requirement may vary from lender to lender. Before Applying for a Home Loan, make sure you know about all the necessary documents that you need to have in place. These usually include your PAN card, Aadhaar Card, Income Tax Returns, income proof, property papers, and so on.

5. What are the loan pre-closure charges

Pre-closure charges are charged by the bank in case the borrower pays the loan amount before the due period. While most banks follow the practice of charging such amounts, there are a few banks that do not levy any pre-payment charges. Therefore, it is essential that you know about your bank’s stance on the same.

Applying for a housing finance involves careful consideration of several factors that you should always inquire about from your banker. To know more about Home Loans, you can get in touch with Mortgage Specialists of MyMoneyMantra.

Also Read: 5 Best Home Loan Providers in India

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