Imagine your Cyberjaya property or Kuala Lumpur property is a palatial house complete with a swimming pool and very luxury – in short the perfect home. For almost everyone, the perfect abode is a long – cherished dream. This, however can prove to be expensive. One may work hard for many years but this dream might be some way from reality. Do not lose hope as there are home loans on offer. These loans have gone a long way helping people buying what in real estate terms is known as a hot property.
A word of advice here, before thinking of a home loan or purchasing the ultimate home, it is prudent to find out how far does your loan eligibility percentage extend. A lot of people on the verge of purchasing a property suddenly receive a message from the bank stating they are not eligible for a loan. Egg on your face and situation avoided.
From a bank’s point of view, they are lending money which they have to recover. A way of avoiding such embarrassment is to sit down and think about what factors will influence the home loan. Obviously, one’s salary is a decisive aspect, but there are a lot of other parameters banks look at.
The Borrower’s Financial State
The Debt Servicing Ratio (DSR) method is used to determine if the borrower has enough funds to clear the debt. Different banks have different methods of ascertaining whether an individual can be given a loan. The person’s salary is compared to the amount of money they owe. The interest fund, leases and principal funds are checked out.
Stability Is Always a Plus
Banks are more inclined to give loans to people who have enough money to live well and make future purchases. A stable job and spending habits are well – within your financial means banks lean your way. There are numerous ways to check one’s credit records.
Real Value of the Property
Banks and real estate people may have differing viewpoints about the value of a property. Some banks are of the opinion that, some properties are not the worth the price they are sold at. They are wary of paying more than they should. To counter this they have people of their own who gauge the value.
The Lower The Credit Needed, The Better.
In banking terms, the higher the down payment, the lesser amount you have to pay. The more money the loan applicant has the greater the chances of being approved.
Banks always incline toward those who can shell out a greater part of the money needed for the purchase. On many occasions, this is the difference between rejection and approval.
Always Beneficial to be Younger
Studies show in some cases, it takes up to 35 years to pay the money, therefore banks more often approve loans of younger people. Evidence clearly shows someone in their early twenties stands a better chance of repaying the loan than a 60 – year old. It is therefore advantageous to apply for a loan if you are younger than to wait till you reach your old days
A small family is an Advantage
Most people while applying for a home loan have families. Some are just husband and wife. They may have a child. Any banking institution has more confidence in families such as these. On the other hand an individual with a large family may find it a little difficult to procure a loan. Someone who does not have just a wife and a child but parents and other siblings to look after, in most cases make banks reluctant to give a loan.
Relationship with Joint Applicants
When giving a bank loan, it is beneficial if there are two or more people applying for it. It’s an ever bigger advantage if there are more than two people. The more applicants the greater the chance of the loan being cleared faster. Staying on the question of security, if the individual’s parents or even another sibling shows willingness to lend a hand helps.
Normally, though, it is the husband and the wife who are desirous of the loan. It is important to provide a united front as banks may query what may happen if one of them leave. In the case of a couple, institutions tend to be cautious.
A Stable Income
This is no doubt the most important factor. A lot of people who are looking to purchase a house of their own do have stable jobs. A plus is they will be at a point in their career when they are earning a sufficient amount. Also, in all probability, they work in a high ranking position. Their appearance suggests to everyone they will clear the loan. Banks always look for security such as this.
On the other hand, someone who does not have a full – time job, the word precarious springs instantly on the mind of the lender. Even someone who has started a business is viewed with some uncertainty. Also, a new entrepreneur would have a loan to clear. For any bank security is sacred and anybody who fits the aforementioned presents a high- risk investment.
Previous Dealings With Banks
If someone has taken a loan and paid back without any hassles, they stand a good chance of getting another one. There are also applicants who are loyal and they are looked upon in a favorable manner. Some would say it gives them an advantage.It also helps to stay in the good books of a bank. Conflict in the past means crossing you from their list. This said one would have to do something outrageous to be blacklisted by a bank.
Dishonesty is a major factor in putting off banks. If you attempt to conceal some information to procure it, it comes back to haunt you. They may think of you as a fraudulent person, trying to cheat them. A lender may never work with you again.While procuring a loan is a hard task, it is not impossible. Some parameters have to be in place, thereafter it is a matter of time. The moment any loan applicant sees the loan approved, they breathe a sigh of relief, become confident and feels joyous. From then, the dream home beckons.