In India, buying a home is a matter of immense pride as it indicates your sound financial bearing. Given this, your parents encourage you to buy a house when you start earning a decent amount. Besides letting you boast pride of ownership, buying a house assures long-term financial security. You can be assured that your loved ones are taken care of regardless of anything.

Financing a home purchase can be difficult. However, applying for a Home Loan makes it relatively easy. It lets you borrow a lump sum at a competitive interest rate for at least 30 years. You can repay the Home Loan in Equated Monthly Instalments without feeling burdened. You can apply for a Home Loan with any bank. Here are the various challenges you may face during the application and different ways to tackle them:

Lower the Loan amount

The bank considers your requirements and eligibility to approve your Home Loan request and extend a suitable amount. However, due to poor eligibility, the bank may extend a lower Loan amount. You can do two things here: take the amount offered by the bank and self-finance the remaining property value or take time to improve your Home Loan eligibility and get the desired amount. The second option is more viable.

Loan rejection

Loan rejection is the most common challenge Home Loan applicants face. Do not feel disheartened if the bank rejects your request. Contact your Loan executive and find out the reason behind the rejection. Typically, the bank rejects your request when your documentation is incomplete or inaccurate or you lack Loan eligibility. Work on the rejection reason and reapply after some time.

Lack of understanding about interest rates

The Home Loan interest rate is of two types: fixed and floating. The fixed Home Loan interest rate remains constant throughout the repayment tenure. The floating interest rate varies throughout the repayment tenure as it depends on market fluctuations. Consider your risk tolerance to choose a suitable Home Loan interest rate type.

Lower property valuation

The bank sends its executives for property valuation when buying a resale flat. The bank extends a Loan amount based on your eligibility and property valuation. You find yourself in a fix when the bank's property valuation is lower than the purchase price quoted by the seller. In such cases, renegotiate with the seller for a better purchase price, as the bank's property valuation is rarely wrong.

Non-refundable processing fee

You need to pay a processing fee when applying for a Home Loan. The fee can be a fixed amount or a percentage of the Loan amount. The fee is non-refundable if your Loan application is rejected. Hence, applying for a Home Loan with a bank with a reasonable fee structure is always best.