Four Ways to Quickly Pay off and Save Money on Your Home Loan

Paying off a loan on your home is a large undertaking, but there are several tricks you can use to make the process faster. With a little know-how and some financial discipline, you can pay off your loan before its due date and save thousands of dollars in interest. 

Here are four ways to pay off your home loan quickly and save money.

Put Your Tax Returns Toward Your Loan

If you’re like most working people, you probably see a decent chunk of money come back to you during tax season. Although most people use their returns to pay for non-essential luxuries, it’s usually smarter to put it toward your debts. 

Depending on the size of your return, you can off several hundred or even a few thousand dollars each year this way. Over time, you’ll significantly reduce your loan and save large amounts of money in interest payments.

Refinance Your Loan

For older loans, refinancing may be a good option. Whether you have a mortgage or an outstanding home equity loan, you can likely get a lower interest rate today than you would have a few years ago if you refinance. 

If you can secure a lower rate, you’ll be able to save a great deal of money over the life of the loan.

Take on a Side Job

If you really want to pay your loan off as quickly as possible, you can consider getting an extra job on the side and putting all of the earnings from it toward your loan. Even a part-time job that allows you to work an extra 10 hours each week will allow you to reduce your loan amount by thousands each year. 

If you can’t arrange your schedule to accommodate a part-time job, consider driving for Uber or some other form of flexible gig work.

Rent out a Room

Speaking of gig work, you can also make some extra money by renting out part of your home through short-term rental platforms like Airbnb. This method is especially good for young, single people working on paying off their first homes. 

Whatever profits you make from your rentals can be used to pay down the loan. Once it’s paid off, you can even continue to rent the space out to generate some extra income for yourself.

These are four of the best and fastest ways to pay your home loan off as quickly as possible. Paying your loan down will take time and require some sacrifices, but you’ll save thousands of dollars in interest payments if you go about it correctly.

Tax Implications on a Second Home Loan: A Must Read

With India’s economic growth and so many affordable housing options, you can buy more than one property. Gone are the days when one would save all their money to buy one house and stay there forever. Real estate companies are acquiring land and building apartments that are accessible to all.

You also do not have to invest all your savings to buy another house. With easy home loans and affordable home loan interest rates, even you can buy a second home. Plus, tax benefits on second home loan make this even more attractive. The tax benefits work in India but not in all countries, there is information on the Australian system here.

Tax Benefits on Second Home Loan

The tax applicable to the owner of a second home is variable. The three variations are:

1. One house is on rent.
2. Both houses are on rent.
3. None are on rent.

According to the tax laws, when you are the owner of many properties only one house is considered to be self-occupied. Self-occupied means:

1. The owner stays in the property.
2. The property is not given on rent.
3. You get no income from the property. This is also called ‘deemed rented out’.

You can choose to show any of the properties as self-occupied. It does not have to be the first property you had bought. The others will be considered for rent out options.

If the house is on joint ownership, the rent should be split as per the percentage share of the owners. The income from the rented-out property is considered for the actual income tax calculation. This could be either from one house or both.

Tax on Self-occupied House

Say, you have bought a property that has been fully constructed within five years of your taking the loan. What is the home loan tax benefit available to you? In such a case, up to Rs.2 lakh will be exempted from the actual interest paid. 

But, if you are a senior citizen, then the limit is extended to Rs.3 lakh. If the house was not completed in five years, then the exemption limit is Rs.30,000. You can even avail of an exemption of Rs.50,000 for properties whose loans were below Rs.35 lakh. Companies offer home loans up to Rs.5 crore and top-up loans up to Rs.1.75 crore.



Suppose your first home is not occupied by you or you have rented it out and you are still paying the home loan. Then, the actual principal repaid will be applicable for tax exemption with a cap of Rs.1.5 lakh. You can avail of this exemption even on repayment of the loan amount.

Tax on Second Home

The interest paid on the other properties has an exemption limit of up to Rs.2 lakh. There will be no tax exemption on the principal amount repaid if you have taken a second home loan.

Also, the second home is considered wealth. Thus, an extra 1% tax will be applicable if the price is above Rs.30 lakh.

The income from the rent earned on the second home will be taxable. You can deduct the municipal taxes or the maintenance charges on the house to calculate the final income. A standard 30% deduction on rented income is also allowed. 

So, the final taxable income on the rented property will be the actual amount received minus the taxes, 30% deduction, and interest paid on it.

If the property is not let out and remains vacant you can consider market rate prevalent for calculating the income.

Summing Up

Sometimes, the second home may actually impact your return on investment. This happens if the interest rates are high and the property prices have increased. Thus, you need to be smart to know when to invest money. So, keep an eye on property prices and avail of the best home loan interest rate.

How to Get Prepared for Buying Your First Home

It is always important to double-check before aiming or preparing to buy a new home of your dreams, as this is going to be a very big financial commitment in your life. Key things such as income stability and ability to support the first-time bond have to be considered. 

Things may vary between different kinds of people, as a person with a secured job may have regular monthly income will have safety plans. On the other end, a self-employed person may face hiccups in deciding about the purchase, as his income might be unstable and unpredictable. 

 Along with the real housing costs, other property related taxes and fees also need to be remembered to calculate and plan your future properly. To afford the expenses such as deposit of money or the moving costs for the homeowners; one should be very cautious about monthly expenses over your monthly income.

Consideration of Vital Factors Before Buying New Home:

One should have a clear idea about the type of house he/she wants to buy as per the personal requirements, which is vital in deciding about the approach towards the first home loan. 

Whatever kind of house you may choose, one should make sure it lies inside your boundaries of budget. Although it is a dream house for you, it should suit for you practically from financial point of view as well. Getting sunk in debts of loans and buying a mansion will not fulfill the purpose of satisfaction for you.

Not only just the financial aspect, but many other factors such as housing needs, location, work to office distance, distances to groceries and medical stores also need to be considered. Safety and security also need to be taken a look before going for your dream home despite of some interesting deal of price amount. 




 Also, if the area of the home that was bought is far away which has lesser appreciation, you might want to consider another house. All the aspects considered together, will help you to justify the process of house-hunting with great clarity in your mind and get the right home. 

This process is lengthy and may take days to weeks or even months, which in turn depends upon your approach of how you deal with all the related aspects. Also, it is always needed to remember for catching hold of properties that sound relevantly affordable and fair deal instead of playing the card of bargaining.

Tips for The New Buyers:

Photographic memory never fades easily and keeps track of the houses hunted down by you using your phone or digital camera. If the number of houses visited by you in a single day is greater, photographs can help you to organize everything easily.

Penning down your key thoughts, ideas, expectations, specifications of each and every home you visit will help you get to a right decision at the end of everything. 

Mark the surroundings to estimate your expectations and requirements of your new home and test whether your living can be comfortable over there or not.

Taking expert’s advice or the ones on whom you rely more, can help you to get more choices or better ideas. Even if that can be a real estate agent or loan’s manager or your relative, make sure to have your own opinion and genuinely clear idea about what you really want. 

It is always better to compare the best home plans thoroughly before applying for the loan with the bank. As the amount is huge, one cannot undo the whole processing after knowing that other banks are giving a better deal. As it is your own dream home, your finances should not interfere much with your dreams 

How to Finance the Purchase of a New Home

Buying a new home can be one of life’s most amazing experiences. It can be a little intimidating for people who are unsure of how they’ll finance it, however. Homes are enormous purchases. If you’re in the latter group, there are certain suggestions you should run through your mind. Financing a new home is without a doubt something you can do.

Research Home Loans

The smartest home buyers are the people who prepare efficiently. That’s why you should take the time to research the massive and often overwhelming universe of home loans. 

Your aim should be to get your hands on a great interest rate. It should also be to get your hands on a deal that won’t negatively interfere with your lifestyle and comfort level, too.

Set up a Consultation with a Reputable Mortgage Broker

Mortgage brokers can be major sources of help for people who are looking to finance new residential properties. They can help people secure mortgage deals that are a lot more desirable. 

If you want to save a lot on your mortgage, you can’t top the guidance of a knowledgeable and seasoned mortgage broker. Mortgage brokers can simplify the process of finding the most ideal deal out there.

Save Up

Covering down payments can cost people hefty sums of money. If you want to finance your home easily and with confidence, you should begin saving up to handle your down payment well in advance. 

The more money you initially put down, the easier it will be for you to manage your mortgage expenses on a monthly basis. You should always think about the big picture.

Assess All Offers Meticulously

You should never even think about being careless about home loan offers. Don’t assume that they’re all similar. You should evaluate your home loan offers meticulously, and prior to making any commitments. 

It can be unpleasant to commit to a loan only to realize that there were actually much better options out there simply waiting for you. If you give yourself a lot of time to make a solid decision, you should be good to go. Try to find out about as many loan offers as possible. Be as exhaustive as you need to be.

New home financing can seem pretty scary to people who are unfamiliar with the process. If you’re committed and detailed, however, you should be able to do extremely well for yourself. You should aim to be calm, composed, and confident.

A Few Factors that Affect Home Loan Interest Rate

It’s a good thing that you have got the facility of the housing finance to help you buy a home of your choice.

But for availing the facility, the lenders charge you the Home Loan interest.

Although the rate of interest for the Home Loan has reduced in the recent past and touched 8.35%, there are still some factors that can affect it up and down.

In the context of our discussion, let’s see of the factors that can affect Home Loan rates. When you are aware of those factors, you can help yourself in managing the interest rates smartly and make it work in your favour. Take a look!

Your CIBIL Score

The first thing analyzed by your prospective lenders while processing your Home Loan application is nothing but the Credit Score. If you have a strong CIBIL Score which is 750+ or more out of 900, nothing can stop you from enjoying lower Home Loan interest. 




If you still don’t have a robust Credit Score, you can improve it by making all repayments such as credit card bills and existing loan EMIs on time. Borrowers with a higher score not only get fast loan approvals but even the lower interest rate.

The Home that You are Purchasing

The home that you want to buy may also affect the Home Loan interest rate as lenders classify properties in different areas of a city under different risk levels. If it’s your first home, lenders will be more confident to award you a lower rate. Thus, ensure to check the properties type and areas that can help you enjoy a lower Home Loan rates.

Your Home Loan Amount

Want to know your loan amount? Subtract the percentage of your down payment that you will pay (15-20%) from the price of your home to get the amount. Look for a standard home whose price is not very small and not very large. Lenders charge a higher interest rate if you opt for an exceptionally smaller or very higher Home Loan.

Down Payment Size

When it comes to the down payment, the concept is simple – the higher your down payment is the lower will be your Home Loan interest rate. Thus, even if it means using your savings and breaking your investments, strive to put a larger down payment to pay smaller EMIs and the lesser interest rate on it.

Home Loan Tenor

Did you know that even the tenor of your Home Loan can affect the Home Loan interest in the long run? Opting for a longer tenor may let you spread the loan cost such as interest and principal repayment into smaller EMIs and manage things affordably.

The Bottom Line

You are now aware of the Home Loan factors that can affect the interest rates. Assess your needs accordingly, look for the best deal and then only apply online for a Home Loan so that you manage its repayment without poking a hole in your pockets.

What is the Difference Between a Loan Against Property, Mortgage Loan and Home Loan?

When you find yourself in need of a loan, it is important to assess all the options available to you. This will allow you to choose a loan variant that caters to your needs adequately. 

One such consideration is choosing between a loan against property, mortgage loan and a home loan. While all three terms seem similar at first, there are differences that set them apart. Take a look at what these differences are.

Based on collateral

Home loan: When you take a home loan, the home that you are about to buy acts as the collateral for the loan. You have to pledge it to the lender until you repay the loan amount.

Mortgage loan: This loan simply means that you can get access to funds by mortgaging an asset. Here, it is important to remember that the asset may be property, but it can also be gold, investments such as securities, etc.

Loan against property: As the name suggests, when you opt for this loan offering, you must pledge a property that you own in exchange for funds. You can pledge either a residential property or a commercial property as collateral.

Based on purpose

Home loan: When you take a home loan, you can only use the funds from it to purchase a residential property. You can then stay in this property (self-occupy) or rent it out if you’re purchasing a home as in investment. You can’t use it for any other purpose.

Mortgage loan: Mortgage loans are of various kinds, and in fact, the term is used to define a category of loans rather than one particular loan. For example, a home loan is a mortgage loan, as is a loan against property, or a loan against insurance. 



Depending on the variant of the mortgage loan, the end use will vary. While a home loan offers limited flexibility in terms of what you can use the funds for, a loan against insurance allows you to use the funds for any purpose that you deem fit.

Loan against property: This diverse loan offering allows you to use funds for a variety of purposes. You can use the money to buy commercial property or a home for your family. You can also avail the loan for lease rent discounting. 

Whether you require substantial funds to start a business, pay for your child’s overseas education, pay for wedding expenses or invest in an asset, you can take a loan against property to meet any of these needs.

Besides this, if you need a large amount of money and you anticipate unpredictable or periodic need for finance, you can avail the sanction as a Flexi Loan. When you take a Loan Against Property from Bajaj Finserv, for example, you can choose to take the amount as a Flexi Loan and use funds from the total sanction as per your needs. 

You only have to pay interest on the amount that you use, and you have the option to pay interest-only EMIs through the tenor. Once the loan repayment period comes to a close, you can repay the principal. You can withdraw, repay and redraw funds as many times as you want to. 

More importantly, you don’t have to file a new loan application each time you need funds. Simply make a request to access the amount.

Here’s a look at a few benefits that this Bajaj Finserv loan offers.

• This loan gives you a high-value loan that you can use for both professional and personal purposes. As a salaried individual, you can access Rs.1 crore, while if you are a self-employed individual, you can get up to Rs.3.5 crore.
• A loan against property’s interest rates are low, and you can use a loan against property EMI calculator to determine what you monthly outflow will be with ease.
• The documents required for a loan against property are minimal, as is loan against property eligibility. You can apply in a matter of minutes and receive the loan amount within 72 hours.
• You have the choice of a long tenor to make repayment easy. Choose from a repayment period spanning 2–20 years if you are salaried, and up to 18 years if you are self-employed. 
• You can also make use of prepayment or foreclose options at a minimal charge to repay the loan quickly.
• If you already have a loan against property, transfer it to Bajaj Finserv to enjoy fast processing, and add-on benefits such as a high-value top-up loan.
• Manage your loan online with ease via a secure customer portal. Get all loan-related information at your fingertips, as per your convenience. 
• With complete understanding about the difference between the three loans and the benefits of a loan against property, you’re sure to be able to make the right choice for your needs. Before you submit your application, be sure to check the eligibility criteria to see if you qualify.

How to Decide Which Bank/NBFC is Giving the Best Home Loan Deal

Do you plan to buy a new home this season? If you need a Home Loan for that, you have a wide range of options to choose from. These would include banks, non-banking financial companies (NBFCs), and housing finance companies (HFCs).

Even before you choose your property, it is better to look at the right kind of housing loan. But first, you must figure out whether you are eligible for the loan. Here are some quick tips to help you know your eligibility for the best Home Loan deal.

• Ensure that your credit score is in good shape. A strong, healthy CIBIL score will give you greater bargaining power when you apply for a loan.
• Know as much as possible about the prevailing Home Loan rates in the market. 
• A good way to get quicker disbursals with lower rates is to get a preapproved housing loan. Your Home Loan application has a better chance of being accepted with a preapproval. 
• Compare the rates and fees the various lenders are offering and pick the best option.
• Read the fine print, which is not always present in the brochure. Ask various lenders about the fees and costs beyond the principal and the interest. Ask anything that is relevant to your Home Loan need.
• Use the equated monthly instalment (EMI) calculator for every Home Loan you shortlist. The Home Loan EMI calculator is an extremely handy tool. It gives a basic insight into the monthly EMIs you will have to pay. It is based on the principal, the interest rate, and the tenor.

So, How would You Decide Which Bank or NBFC would Offer you the Best Home Loan Deal?

Choosing the right bank or NBFC is not only about getting the lowest interest rate. More importantly, you should deal with the best lenders in India. They would have Home Loan experts to guide you through the procedure.

• Select your Lender: Look for one who offers you several Home Loan options. Look at a broad spectrum of funds, not only from banks but also NBFCs, HFCs, and wholesale lenders. Learn in detail about their lending history, how they operate, and about their continuing services once you pay off your loan. The right lender will not only help you save time and money but also help you dispel doubts about your lending needs. 
• Interest Rates: Fixed Home Loan interest rates give you the satisfaction of being aware of your repayment amount for a definite period. Moreover, the rise and fall of interest rates in the market does not affect the fixed rate. But, you will not enjoy the flexibility of a variable rate of interest. Hence, you must know what kind of interest rate would suit you in the long run.
• Charges and Fees: Do you have to pay any continuous fees or charges? Figure out their effect. Hidden fees, which are usually seen in the form of monthly and annual charges, can greatly influence the cost of your Home Loan.
• Pay Close Attention to Margins: Lending institutions have the right to alter the mark-up rate at any time, without prior information to borrowers. In fact, they use specific determinants to advocate this change in rates. These determinants include the competition rate and the intent to gain more consumers or market share. Mark-up rates can go either up or down. Hence, when you apply for a Home Loan, make sure you know about the current changes in the mark-up rates. 

Conclusion

Applying for a Home Loan can be an arduous task. It can become much simpler when you are aware of your eligibility and the prevailing interest rates before you apply. Your chosen lender should have a comprehensive choice of Home Loan products. They must also provide regular loan health inspections to make sure you have the best product tailored to your needs.

How You Can Transfer Your Home Loan With A Top Up Loan?

When you are unhappy with the customer service of your existing lender or if they are charging you a higher Home Loan interest rate, you can always switch your loan account.

When you switch your current Home Loan account from an existing lender to a new one, the process is called Home Loan balance transfer. A Home Loan balance transfer helps you bring down your Home Loan interest rate and makes it affordable to let you save some money each month.

When you do Home Loan balance transfer, usually the new lender also provides with the facility of a Top Up Loan at a lower rate to assist you in taking care of other financial needs.

Leading online lenders provide a Top Up Loan facility of up to Rs.50 lakh at reduced rates. Yes, the interest and tenor part associated with a Top Up Loan is lesser and longer, respectively. 




Thus, if you want to reduce your Home Loan interest rates and also want to avail a lesser rate of interest, opting for balance transfer should be a good bet. Here’s how!

● Affordable rate of interest

Compared to standard loan, the Top Up Loan that you get with a Home Loan balance transfer is only 8-12%, making it an affordable version of a personal loan. It also means that you pay lesser EMI figure each month.

● You can use it for multiple purposes

A Top Up Loan could be used just like a personal loan which you can use for numerous purposes as per your preferences. Be it renovating your home, emergency medical needs, an abroad trip or more, you can use it for as many purposes as you can think.

● Easy eligibility

Top Up Loans don’t have many issues when it comes to the eligibility. Why? It’s simply because a Top Up Loan is an additional facility with a Home Loan balance transfer and that makes it a no-eligibility loan.

● Flexible tenor

The tenor is nothing but the total duration of any loan in which you need to repay the credit as EMIs. Depending on your loan scheme, the tenor can go up or down. However, when you avail Home Loan balance transfer, the tenor of your Top Up Loan is also the same as that of the Home Loan. What does it mean? It means that you have enough time to repay your Top Up Loan. It is one of the most vital benefits of the Top Up Loan and why borrowers prefer it while availing Home Loan balance transfer.

● Non-fussy and quick application procedure

Although a Home Loan requires you to care for various terms and conditions, the Top Up Loan does not. You can easily eliminate these consuming and exhaustive exercises while opting for a Top Up Loan. Why? It’s because a Top Up Loan is a linked feature of Home Loan balance transfer, you don’t have to care about the application procedure. All that you need to do is – request your new creditor the Top Up Loan facility, quote the loan amount and, you are good to go!

The Bottom Line

A Home Loan balance transfer is a unique facility which also helps you avail a non-messy and feature-rich Top Up Loan. If you are looking out for an additional loan to cover up your various needs to fulfil your life goals? Opt for a Home Loan balance transfer and apply for a Top Up Loan to the tune of Rs.50 lakh with a leading online Home Loan service provider.

When you will do a Home Loan balance transfer, you also stand to gain good customer care services and not to forget the reduced Home Loan interest rates. Contact your new lender today and know more!

How You Can Get Tax Benefits on Home Loan

We’ve all considered getting a Home Loan at some point. Investing in real estate is never a bad idea. Real estate has had a solid record of increasing in value over time. Besides, there are also various tax benefits on Home Loans that you can avail.

But, a mortgage isn’t the easiest loan to get. In fact, it can be one of the hardest. This is where you should consider different lenders, various schemes, and the rates of interest that are offered. 

But it comes as no surprise that there isn’t much clarity on how Home Loans work. How do you pick the best Home Loan lender, one that suits your personal financial status?

Here’s a quick guide that can help you understand the complexities of Home Loan and how you can get one that works for you.

Why Go for a Home Loan

The obvious reason you should go for a Home Loan is the financial cushion it provides. A property is a serious purchase, and a Home Loan will make it easier for you to make that purchase. 

With it, you don't have to compromise on your lifestyle and lose financial stability. Besides, a Home Loan application is now easier to apply to than ever before.

There are also some other tax benefits that you can get on your Home Loan.

So, tax benefits on Home Loan can be availed under the following sections. These are government warranted and can only be found with banks, NBFC, and other financial corporations. 

So, a regular taxpayer is eligible to get the following tax benefits under these sections.

Section 80C

This falls under the Income Tax Act. It entails that tax benefits can be availed depending on the principal amount of said Home Loan. There is an upper limit of Rs.1, 50,000 on this tax. 

This tax deduction takes place irrespective of the time and date of the payment. Even the total amount for stamp duty and the registration is allowed for deduction. This will be deducted even if the Home Loan isn’t taken.

Section 24

This section makes the borrower eligible for a tax benefit even on the interest that is paid for the Home Loan. There is an upper limit of Rs.2 Lakh for this deduction. It’s done in a different manner. 

The interest of various investments over a period of time summed and then deducted. You can claim this on a yearly basis even if no payments have been during that year.

There is a slight catch. If you have taken a repair, reconstruction, renewal loan, then you aren’t eligible for tax deductions on the interest of said loan. So it’s best to keep that in mind when you go for a Home Loan.

Section 80EE

This section offers borrowers a tax benefit on the interest they pay for a Home Loan if they’re first time buyers. It's difficult to get this deduction due to two reasons.

One is that the total value of the property being purchased shouldn’t exceed Rs.40 Lakh. The second is that the amount sanctioned cannot go beyond Rs.25 lakh. The upper limit of the deduction under this section is Rs.1 Lakh.

Keeping these things in mind should get you the best kind of tax benefits possible on Home Loan. If you prefer a Joint Home Loan, then ensure that you and your partner have good credit scores. That can help reduce the interest rate.

10 Reasons For Home Loan Rejection That You Weren’t Aware Of

After toiling for several months, or perhaps years, you finally save enough money to make the down payment on your dream home. But what happens if you collect all the documents required for Home Loan, and painstakingly fill out the applications, only to find out that your Home Loan been rejected?

Insufficient income and poor credit scores are some of the common causes for loan rejection. There are plenty of other obstacles on your path to loan approval that you might not have even considered to be a hindrance. These factors are sometimes portrayed in a subtle manner on your application. Lenders review many factors before they actually consider approving your loan application.

Here’s a list of reasons that could lead to your Home Loan getting rejected:

1. An Incomplete Education

If you’re a school or a college dropout, getting a Home Loan can be quite a challenge. A minimum qualification of at least a bachelor’s degree assures lenders that the risk of you being unemployed is minimum. Undergraduates have a rare chance of getting their Home Loan sanctioned.

2. Insufficient Work Experience

You might have waited all your life to get that dream house. So once you take up a job with a decent salary, there is a good chance you’d like to apply for Home Loan almost immediately. However, most lenders look for a work experience of at least 3 years, and even if you earn enough money, your Home Loan will most probably be rejected.

3. Stature of your Company

If your company is a start-up or has been financially unstable, the chances of loan rejection are high.

Lenders may ask for financial reports of the organisation you work with. Based on this report they can identify the profit margin of your company and choose whether to approve or reject your application. Lenders can identify if a financial dip in your organisation will have adverse effects and have a negative impact on your loan payments.

4. Change of Career

Job stability is an important aspect lenders consider and financial institutions look for a minimum of 3-year work experience. So, if you’re in between jobs and don’t meet this requirement, your loan application is instantly declined. Being a permanent employee of an organisation and having worked with that particular firm for at least three years is an added benefit.

Even if you choose to quit your job and take up a self-employed venture, the risk of loan rejections prevails. You need to successfully run your firm for at least 3 years. Lenders look for an increasing profit for at least 2 out of the 3 years, to trust you with their loan.

5. Joint Family

While being a part of a large household with your parents, in-laws, siblings, their spouses and children, might make your family ties stronger, it can have an obstructive impact on your Home Loan. Lesser the number of dependents, higher are the chances of loan approval.

Being in a joint family may also lead to situations where you have to co-own properties—maybe a bigger home that you could all live together in. Lenders are particular about the number of co-owners. Most lenders allow only 3-4 co-owners. Some financial institutions may approve up to 8 members as co-owners.

Keep these factors in mind when you apply for Home Loan if you’re living with your extended family.

6. Unapproved Builder and Property

With so many homes and apartment complexes coming up in every city, you can easily get lured into buying a home from an unapproved builder. This not only gets your loan rejected, but you will have to head to a different bank for a loan and you may not be able to get the desired interest rates or benefits.

In rare cases, some builders are approved only by some banks. Finding the right bank can eliminate the risk of the dismissal of your Home Loan.

There are some cases where the builder might be a reputed one and approved by your bank but the project itself hasn’t received an approval. Another possibility is that if the project is enormous, one of the phases could not have been approved.

A quick check on the builder and the property goes a long way, as far as your Home Loan is concerned.

7. Actual Value of Property

If your dream home’s actual cost is lesser than what you’ve received an estimate for, the bank can, and will, reject the loan request. The rejection can occur on the grounds of inflation, where one may have given a greater valuation estimate in order to get a higher loan amount.

You can find banks that overlook this shortcoming and approve your loan with very low rates of interest. The risk of not getting a good deal on the loan, along with the risk of rejection, makes the precise valuation of property a key factor.

8. Age of the Property

Make sure you buy property that is being built with quality standards that will allow it to last for at least the next four decades. Banks and NBFCs are particular about the longevity of the property. 

Most of the policies state that the building should be able to last for a minimum of 20 additional years, once the tenure has been served. If you’re buying an old property, ensure the building meets the required standards before you consider purchasing it.

9. Backing Someone Else’s Property

You may want to do your friends a favour by signing up to be a guarantor for their Home Loan. But think twice before you do this. If you also plan on applying for a Home Loan, this might be a bad idea as it blocks your eligibility to take up a Home Loan by yourself. 

10. Bounced Cheques

Your cheque could bounce due to a signature mismatch or insufficient funds in your account. A signature mismatch can leave a negative impression on your lender’s mind. Insufficient funds only make matters worse as the financial institution might blatantly reject your application.

The fact that your cheque has bounced creates reliability issues at the lender’s end. They might deeply contemplate giving you a loan if you haven’t even maintained the small amount of processing fee required for your Home Loan.

Just having a good credit score and having a high-paying job, aren’t sufficient for a guaranteed loan approval, despite being two of the major factors to be considered when you apply for a loan. Factors like self-contribution amount, the listing of your locale and previous occupant of your property—apart from the aforesaid reasons—can also lead to the rejection of your Home Loan application.