NEWS & ADVICE : HOME LOANS
7 most common Home Loan problems faced by borrowers in India
By Joseph Samson
Print    Email    RSS   

Getting a home loan is a lengthy procedure. However simple it might look in the bank's advertisement, the fact remains that there are a lot of hiccups in the entire process. Here are the 7 most common problems faced by home loan borrowers in India. Each problem is discussed in detail and appropriate remedies are mentioned along with it. The objective of this article is to ensure that your home loan becomes a hassle-free experience.

1 Rejection at the first stage

Strange but true, many of the home loan applications do not pass even the first test. They are out rightly rejected due to incompatibility between the borrower's qualifications and lenders requirements. It could be the age criteria, income criteria, proper documents not being submitted, the bank not being able to verify your details properly, not passing the field investigations conducted by the bank and many more. The best way to avoid being rejected in this way is to check the eligibility requirements of lending banks carefully and apply only to that bank which matches your profile. Keeping proper documents ready and providing accurate, verifiable details to the banks will ensure that you sail through the preliminary verification process.

2. Processing fee not refunded

With every application form for home loans, banks require about 0.25% to 1% of the loan amount to be submitted as the processing fees. This processing fees is generally NOT REFUNDABLE. In simple words this means that for whatever reasons, if the bank finds that you don't deserve the home loan, this fees won't be returned. This is the cost of applying for home loans. If in any case, the bank you have applied to states that it will refund the processing fees in case the bank doesn't sanction you the home loan, it is better to get any such declaration in writing and make sure that the clause is enforceable. A verbal statement by bank authorities won't be of any use unless it is properly and legally documented. In all other cases there is little remedy for processing fees being not refunded.

3. Desired loan not sanctioned

The loan amount sanctioned is based mostly on repayment capacity of the borrower. Many things come into picture, when the bank decides how much home loan a person can get. The monthly income, financial history, other unpaid loans with the borrower, past repayment record, credit card usage history if any, bounced checks, average balance with the banks, continuity in present employment, total years in employment, nature of employment etc. These factors all clubbed together help the bank to decide whether it will be able to recover its money satisfactorily or not. If you get rejected due to any such criteria, you can increase your eligibility by clubbing together your spouse's, father's, son's, relative's income and make them a co-borrower. In addition to it, if you have sufficient funds in NSC's, provident funds, LIC policies etc. you can keep them as collateral and ask the bank to finance your home loan.

4. The interest rate dilemma

Whether to go for a fixed rate or floating rate interest for home loans is a dilemma which almost every home loan borrower faces. Even after deciding on a particular loan regime, the home loan terms and condition fine prints can create havoc with your interest rates. For example even if a borrower has opted for fixed rate home loan and the bank has promised him a rate which he feels is good, the catch is in the fine prints which authorizes the bank to vary this fixed rate every 2 years, things can go worse for the fixed rate borrower. Similarly if the bank doesn't pass you the benefit of lowered interest rates in floating interest rate regime, it will be of a little value. Avoiding such a situation essentially means that you study the terms and conditions of home loan carefully and clearly ask the bank about such things. In case of floating interest rates the facts can be verified by checking how the interest rates on home loan dropped during low interest periods. Ask your bank for some historic floating rate changes.


Page  | 12 |  
(Comments Posted : 148) Post Your Comments
1. We Provide Loans For B Khata @9008133998 / 9964563600. For B Khata,A Khata, Panchayath Khata Site and House purchase cum construction
Renna (Posted: Sep 15, 2017)
2. We Provide Loans For B Khata @9008133998 / 9964563600. For B Khata,A Khata, Panchayath Khata Site and House purchase cum construction
Readmore:
construction loan for b khata
Reena (Posted: Jun 12, 2017)
3. We Provide Fully Furnished Space shared office in Bangalore call @ +91-7892384991.We offer remote employees, freelancers, entrepreneurs, the self-employed, road warriors a professional space to get work done.As well we provide good conference room,Meeting Room, The training room, work stations etc. Share Office Solutions is your perfect place to conduct your business.
construction (Posted: Jun 9, 2017)
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Property: A good investment option to...
Know About Different Types of Home Loans...
Home Equity Loan: A shoulder you can bank...
Home Loan: A way to reduce your taxable...
Carnival of Indian Personal Finance Blogs #2


I want my Housing loan provisional certificate....
PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive