A reliable and convenient method to deal with a lack of funds, a mortgage loan seems to be an ideal solution in times of a financial crisis. A secured form of credit, a mortgage loan can be of two types – home loan and loan against property (LAP). In a home loan, the money is specifically used to purchase a house whereas, in the case of LAP or home mortgage loan, the funds can be used for various purposes such as planning a wedding, starting an enterprise, a medical emergency, etc.  

Whether availed to buy a home or acquire substantial money against the property, you are required to pledge your residential or commercial property as collateral to the lender until the loan is completely paid off. Although offered at an attractive property mortgage loan interest rate and flexible repayment terms by the lenders, one must do an in-depth investigation about the factors involved in getting the loan approved to avoid any hassle at a later stage.  

Scroll down to know more about 5 tips to increase the chances of getting a mortgage loan approved –

• Opt for longer tenures

While applying for a mortgage loan, one of the crucial aspects to focus upon is the repayment tenure. If you opt for a small tenure, the EMI amount would turn out to be on the higher side. Conversely, a longer tenure will result in low-cost EMIs and also reduce your fixed obligation to income ratio. Although banks offer a loan tenure ranging between 20 to 30 years, you should choose it wisely based on your EMI affordability.

• Improve your credit score

Another key thing that helps in improving the odds of getting your mortgage loan sanctioned is boosting your credit or CIBIL score. Lenders often pay a keen emphasis on the borrower’s credit history to assess their debt-handling and repayment ability. Along with it, a healthy CIBIL score also helps in obtaining a low home loan against property interest rates. You can improve your credit score by paying your credit card bills and existing loan EMIs on time as well as maintaining a good CUR. Checking your credit report regularly and reporting the errors/ discrepancies to the agency for correction also helps in increasing the credit score. 

• Improve debt-to-income ratio

While evaluating your loan application, the bank makes sure that the EMIs do not exceed 60% of your income. Hence, you must improve your debt-to-income ratio before applying for a mortgage loan as the banks tend to provide the loan amount keeping in mind your EMI affordability.  

• Club all incomes and bonuses

The larger the earnings, the higher will be the monthly installments you will be able to submit to the bank. Hence, you should mention all the income sources such as monthly salary, performance bonus, etc. to the lender while applying for a loan to improve the odds in your favor. 

• Add with a co-applicant

Lastly, you can choose to apply for a mortgage loan with a co-applicant, be it your spouse, sibling or parents. With a co-applicant possessing a steady source of income and a healthy credit score by your side, the bank will combine your earnings and surely approve your loan application without any hassle.