4 Common Issues Faced By Home Loan Borrowers
Home loans facilitate the purchase of your new dream house. However, home loan application involves a tedious and lengthy procedure and a stream of documentation. There are some very common issues which are faced by the loan borrower at the time of applying for home loan. The pain of getting your application rejected repeatedly is certainly frustrating and leaves you feeling restless and helpless.
When you step out in the market as a customer for home loan application, there are a number of issues which cross your path. Irrespective of your background or the amount of loan you need to borrow you need to borrow from the bank, certain problems are faced by each individual. Here are some of the very common and frequently occurring problems which are faced by the home loan applicants.
"Initial phase" issue
Almost all applicants face this trouble. The home loan application is mostly rejected by the bank or any other lender in its initial phase. The reasons can be anything- inadequate income level, unstable and flaky employment record, poor bank records, weak credit score, or mismatched income criteria. Due to one reason or the other, the home loan application usually does not pass the first stage. As a smart and aware customer, plan ahead. Keep your documents ready and be aware if the application criteria, in order to be in sync with the same.
"Loan limit" issue
This is another common issue which is faced by individuals who apply for home loans. The amount of money which a person desired to borrow might get declined by the bank or private financial lender. The reason for declining his or her application is usually a doubt over the repayment capacity. If the bank or financial company does not find the borrower in a sound financial state, earning enough income and having a strong credit score, it won"t grant the home loan amount.
"Processing fee" issue
The requirements of the bank and qualifications of the borrower need to match. When there is a clash in this arrangement, problems arise and the home loan application of an individual gets rejected. However, even if the application gets a "go ahead" from the lender, the borrower still might face other issues. One of those is the processing fee issue. Both government banks and private financial institutions charge processing fee on home loans. This fee usually ranges from 0.25% to 1% of the total loan amount. But, if your loan does not get sanctioned as a rule you must get back the processing fee. However, many lenders do not follow this rule. So, it is better to choose the lenders which state in written that processing fee would be refunded, in case the loan does not get sanctioned.
"Choosing the best rate" issue
Home loan interest rates vary from fixed to floating to variable. It is always a dilemma for the people to choose the appropriate interest rate for themselves. Mostly, the banks have terms and conditions regarding the interest rates that are mentioned in fine print. These terms usually state that the bank has the authority to change the interest rate at the interval of two years. So, even if you have opted for a fixed rate, you do not have the surety that it would remain the same throughout the tenure.
When you step out in the market as a customer for home loan application, there are a number of issues which cross your path. Irrespective of your background or the amount of loan you need to borrow you need to borrow from the bank, certain problems are faced by each individual. Here are some of the very common and frequently occurring problems which are faced by the home loan applicants.
"Initial phase" issue
Almost all applicants face this trouble. The home loan application is mostly rejected by the bank or any other lender in its initial phase. The reasons can be anything- inadequate income level, unstable and flaky employment record, poor bank records, weak credit score, or mismatched income criteria. Due to one reason or the other, the home loan application usually does not pass the first stage. As a smart and aware customer, plan ahead. Keep your documents ready and be aware if the application criteria, in order to be in sync with the same.
"Loan limit" issue
This is another common issue which is faced by individuals who apply for home loans. The amount of money which a person desired to borrow might get declined by the bank or private financial lender. The reason for declining his or her application is usually a doubt over the repayment capacity. If the bank or financial company does not find the borrower in a sound financial state, earning enough income and having a strong credit score, it won"t grant the home loan amount.
"Processing fee" issue
The requirements of the bank and qualifications of the borrower need to match. When there is a clash in this arrangement, problems arise and the home loan application of an individual gets rejected. However, even if the application gets a "go ahead" from the lender, the borrower still might face other issues. One of those is the processing fee issue. Both government banks and private financial institutions charge processing fee on home loans. This fee usually ranges from 0.25% to 1% of the total loan amount. But, if your loan does not get sanctioned as a rule you must get back the processing fee. However, many lenders do not follow this rule. So, it is better to choose the lenders which state in written that processing fee would be refunded, in case the loan does not get sanctioned.
"Choosing the best rate" issue
Home loan interest rates vary from fixed to floating to variable. It is always a dilemma for the people to choose the appropriate interest rate for themselves. Mostly, the banks have terms and conditions regarding the interest rates that are mentioned in fine print. These terms usually state that the bank has the authority to change the interest rate at the interval of two years. So, even if you have opted for a fixed rate, you do not have the surety that it would remain the same throughout the tenure.
