Applying for a home loan can be a tedious process. The submission and verification of the relevant documents and other procedures could stretch the approval time by months! Hence, a short approval time is essential. Before we divulge how you can shorten the approval time, here’s what to know before you get the ball rolling for the application process—conduct thorough research on the lender and the plan you’ve picked to buy your dream house. Preparation goes a long way in making the process simpler and more efficient.
Ways to shorten your home loan approval time
- Keep your credit score healthy: A healthy credit score is crucial when receiving approval for a home loan. Here’s how you can maintain a good credit score:
- Always complete your payments on time, whether credit card or utility bills.
- Ensure that your credit utilisation rate is low. Credit utilisation refers to the amount of credit you use compared to the overall amount.
- Pay off your debts as quickly as possible.
- Monitor your credit reports periodically and report any anomalies to the credit card companies.
- Pick the right lender: With many home loan options available in the market, it is easy to get confused and pick the wrong lender. Hence, do your research before choosing one. Some lenders offer a home loan with a much shorter approval time and a lower interest rate than others. The fastest way to get your home loan application accepted by a lender is to get ‘pre-approved’. Pre-approval refers to a scenario in which the lender has already assessed your credit score, income, and other factors and decided that you’re good enough to avail of a home loan.
- Make a more significant downpayment: Usually, lenders expect home loan buyers to make a downpayment of at least 20% of the total home loan value. Making a more substantial downpayment than usual has its benefits. Not only will it make the approval of the home loan much more accessible, but it will also reduce the rate of interest to be paid. However, if you cannot increase the downpayment value, you can look at other options. For instance, applying for a home loan with the spouse could be the way to go.
Before applying for a loan, you must get your financial ducks in a row. Maintaining a healthy credit score, doing thorough research of the home loan lender market, keeping all the relevant documents ready, and being transparent with your income, debt, and assets are the ways which help you reduce the home loan approval time.
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