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Checklist for Home Loan Application


You must have been saving bit by bit for buying your dream home. You would have selected the neighbourhood also and would have been making enquiries with the real estate agents or online websites to find out the best deal. But with the speed real estate prices zoomed up across the major cities in India, you would have been forced to look at other alternatives.

One alternative could be to get a smaller home or get home in an inexpensive neighbourhood, and the other alternative is dropping the idea of buying your home now and wait for the real estate prices to fall down. But is there any guarantee that the prices would fall down and if there is then no one can tell when they will fall down?

Are you willing to wait for such a long period and continue to face the whims and fancies of your landlord in the meanwhile? Well you should know that there is an ideal solution to your problem as well, Applying for a Low-Interest Home Loan.

What is a Home Loan?

As the name suggests, a Home Loan is an unsecured form of loan extended by all financial institutions in India to facilitate your quest to purchase your own home. Many lenders also provide pre-approved Home Loans to their existing customers with a good track record. You need to pay the margin money to the bank (ranging from 15% to 30%), and the rest is paid by the bank to the seller. The property is hypothecated with the bank, and you are expected to pay your EMIs (Equated Monthly Instalments) on time for the remaining tenor of the loan to finally get all the rights to the house transferred to your name. Home Loans usually are extended for 15-20 years, and interest rate varies from 8% to 12%, depending on the lender.

Checklist for a Home Loan Application

If you have decided to avail a Home Loan, then before you start the Home Loan application process, you must ensure that you meet the conditions mentioned in the below-mentioned checklist:

  • Check your credit score
All lenders have guidelines related to the minimum acceptable credit score. Your credit score reflects your credit behaviour and creditworthiness to the lender. If your credit score does not meet their guidelines, your applications would be rejected.

So, you should check your credit score yourself before applying to the bank. You should continue with the application only if your credit score is more than the required levels. Otherwise, you should wait for some time and work towards repairing your credit score.

  • Identify a lender
Different lenders offer different types of Home Loan products and with different terms and conditions. Before you take a final decision of moving ahead with the loan application, you must conduct thorough research and find out the most suitable lender for your requirement, whose terms and conditions meet your expectations.

You should understand that just applying with your banker might seem more comfortable but might not be the best decision for you. So, check out all your options and then make a decision.

  • Understand the margin requirements
When you apply for a Home Loan, you are expected to contribute the margin towards the total amount to be paid to the seller. This may vary from 10% to 30% depending on the financial institution. So, you should assess the value of the property that you want to purchase and then calculate the margin you would require.

Make sure that you save at least 30% of the total amount. It is indeed possible that your eligibility is calculated by the lender as lesser than you expected and, in that case, you need to pay more money towards margin contribution. So always save more towards the margin money to be on the safe side and avoid any last-minute scramble.

  • Improve your financial statements
You must know that when you apply for a loan, all your financial statements will accompany the application. It includes your income tax returns for 3 years, your bank statements for 1 year, your net worth statements, and so forth. You must keep them updated and ready.

If you have not filled your income tax returns, make sure you pay them before you apply for the loan. Your bank statements should reflect a healthy balance, and there should be no cheque bouncing also. So, if there are any such issues with your financial statements, you must resolve them at earliest.

  • Check your EMI affordability
You should calculate the amount of EMIs that you can afford. Lenders usually want that your EMI liabilities should not be more than 40% of your monthly income.

So, you should assess your future income level, expected cash flows, your retirement planning, your kid’s education needs and then decide the level of EMIs you can afford. You should aim for an EMI to the tune of 30% of your monthly income, as such there would be a margin for any unexpected emergencies which might force you to opt for another loan.

  • Create a contingency fund
Purchasing a home entails other types of expenses such as registration, stamp duty, agent commission, moving expenses, and so on. So, you must create an emergency fund to be able to meet these expenses easily. This is necessary to avoid any last-minute scramble.

If you plan in advance and prepare for all the necessary steps involved, getting your Home Loan application approved is going to be relatively more comfortable.


To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989. 

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers. 

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