What Problems Borrowers Face while applying For Home Loan?

Most borrowers apply for home loans unprepared and as a result, their applications get rejected at the preliminary stage itself. While there is no doubting the fact that applying for home loans these days through web portals like housing.com is simple and easy, buyers must thoroughly prepare before making the application. Here are some of the common problems faced when applying for home loans –

Home Loans Problem

Rejection at the application stage

Most housing loans, home loan top-ups, credit for construction, etc. are rejected at the application stage itself. This is because either application forms are not filled correctly or the buyers furnish incorrect information. Having said this, the rejection at the initial stage is valid mostly for offline applications and the customers do not have to go through this trouble in case the application is made through an online source like housing.com. This is because in an online application the form cannot be submitted unless all of the mandatory information is filled in.

Unable to meet the eligibility criteria

The other problem that several home buyers face is that even though they do most things right they are still unable to get the home loans since their income levels do not meet the requisite criteria. The crux here is that they come to know about the eligibility thing only after sufficient time is passed and at times this could result in deals getting canceled or sellers demanding extra money. Hence, it is advisable to check the home loan eligibility beforehand on credible web portals like housing.com. This will ensure that there is no undue delay in the home loan process.

Forfeiting of processing fees

There have been many instances wherein home buyers had to part way with processing fees because they could not meet the lender’s criteria for a home loan. Most creditors ask for a processing fee at the application stage itself. Hence, it is advisable to take the help of financial experts from sites like housing and exercise all due diligence before applying for home loans. This will ensure that prospective home loan customers do not have to go through the hassles of their applications being rejected.

Lower amount sanctioned

The other common issue that most home buyers face in India is lower loan amount sanctions. The banks and housing finance companies have different parameters for evaluating the worth of property and hence the amount sanction also differs. At the same time, not all creditors include stamp duty, registration, service tax, and other charges while calculating the cost of the home and hence the amount disbursed differs. It is therefore important that buyers must consider all of these factors and carefully choose the lender that fits their requirements from all perspectives.

The interest rate issue

There are no uniform interest rates that lenders in India charge. Most banks and housing finance entities have the home loan interest rates linked to their base rate and they cannot go down the base rate at any point in time. Nonetheless, the interest rate is an important factor and it can differ from anywhere from 0.5% to 2.0% across lenders. However, the interest rate is not the only issue; the miscellaneous charges associated with home loans also differ. Hence buyers must take into the bigger picture and carefully all pros and cons before applying for home loans.

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