Need to Know Before Take Housing Loan | Conditions and Tips
Housing loans are the primary means that banks provide to people while buying property. Thousands of people who apply to banks to take out housing loans every day become entitled to housing loans if the conditions are suitable. For a housing loan, there are requirements which an applicant should fulfill as well as those which the property should fulfill. Well, to what extent do you fulfill the requirements for a housing loan? In this article, you'll find what you need to know and which steps you need to take in order to take out a housing loan.
3 Requirement to Take Out a Housing Loan
If you'll prefer to file an application for a housing loan in case you do not satisfy the financial requirements while buying a property, reading this article will be useful for performance of this task. To file an application for a housing loan, first, you must choose a bank that will offer you the most favorable interest rates and conditions. In this respect, evaluation and comparison of the banks constitute the first factor that will lead you to the most appropriate bank. The second step after making the bank choice is the down payment to be taken. Since you cannot buy the entire property with the housing loan you request, you should cover the down payment which is 20% of the property value established by the bank's expert at a minimum. The down payment you have paid will reduce the weight of the amount of loan and the interest payments, which you'll make later. The last point you need to know is that, as we mentioned before, property eligibility requirements for a loan. Please see our article entitled "property eligibility requirements for a loan" for this subject. Before taking out a housing loan, the most important things to know are checking whether you fulfill the eligibility requirements and then checking whether the property for which you'll file an application for a loan fulfill the eligibility requirements.
Prepare Your Documents to Take Home Loan!
Before examining the documents required for a housing loan, the primary requirement you need to know is that you must be 18 years of age. This factor is important to document that you have income. At the stage of documenting your income, the required documents vary by your income status. The required documents for private sector employees, public employees, retirees and business owners are different from each other. The required documents for private sector employees include payroll showing the employee's salary, the workplace's signature circular, a copy of title deed. Those for public employees include certificate of residence, a copy of title deed and salary payroll. For retirees, certificate of residence, document of additional income, if any, a copy of title deed and monthly breakdown of the pension are required. Lastly, if you are a business owner and if you'll apply for take out a housing loan, the required documents include the current version of your tax certificate, your company's signature circular, the chamber registration document of your company, a photocopy of the trade registry journal and your title and the balance sheet. If you have additional income, it is necessary for each income level to document it. You need to provide all these documents in order to take out a housing loan, and this is one of the important things that you need to know for the second stage.
Requirements for Approval of The Housing Loan
In some cases, it may be impossible for you to get a housing loan. Before examining these situations, let's examine the requirements for approval. If completed the documents required to take out a housing loan but will your housing loan be approved? The risk that banks see for those who want to take out a housing loan is low. The loan is high in price and has a long term so your income status will be important for your credit rating. If your credit rating is low, what you need to consider is your history with the banks, which is assessed and based on which the banks give you a credit rating. This rating is between the numbers 1 and 1900. The most risky potential customers are given a rating of 1. In other words, if your credit rating is evaluated as 1900, your loan will be approved. If this rating is below 900, the banks will be hesistant to give you any loan. Having an insight about credit rating evaluation will be useful for you. Depending on your income, the highest credit rating you need to get to qualify for a housing loan is 1200 and above. It is possible to increase your credit rating but it is necessary to carefully examine and organize it.
Considerations for Increasing Your Credit Rating
We have discussed what you need to know in order to get a housing loan, but if your credit rating is not sufficient, as we mentioned above, knowing the path to follow will allow you to get a housing loan. First of all, you should know that it is not easy to increase your credit rating, it will take time, but if you systematically follow these paths, you will achieve a high level of success. In order to increase your credit rating, first, you should regularly pay all your monthly debts except for the minimum amount. If your credit card limit is too high and has a debt, this will cause your credit rating to drop; in order to reduce the risk determined by the system to the minimum level, your high limit credit card should not have any debt, and it should be paid regularly. Your credit rating will start to increase as you start paying regularly. Your credit card debt, your other credit debts, if any, irregular payment of invoices through the bank and any other debts will reduce your credit rating. In short, banks should not think that you are in need of cash. Using a low limit credit card that you can pay will have a positive effect on your ability to take out a housing loan and your credit rating.