A home loan involves a large sum of money. Therefore, the lenders carefully scrutinize your identity and financial stability while processing the application to ensure that they do not lose their money. Naturally, the approval loan process is often stringent with respect to eligibility and documents. One of the most important documents required by the lender is your income proof. If you do not submit your income proof while availing a loan against property, it could be difficult to get a loan. However, you can avail a loan against property without income proof through some ways.
- Add a co-applicant
Lenders need income proof to verify your repayment capability. If you can add a family member as a co-applicant, it can add weightage to your home loan eligibility. You can add your spouse or financially independent children who have a valid credit history, stable income and a good credit score. Adding a co-applicant having a stable job and steady source income can increase the chances of loan approval.
- Pick a lower Loan to Value
LTV or Loan to Value is calculated as below:
LTV = (Amount owed on the loan ÷ Appraised value of asset) × 100
There are two variables that determine the LTV, the amount of loan and asset value. Opting for a lower Loan to Value ratio of 80% or less is ideal. In order to lower your LTV, you can make a larger down payment and choose to go for affordable targets.
- Provide adequate justification
If you have not filed your income tax returns and are unable to submit your income proof, you might have a reasonable justification. While talking to the lender’s representative, convey your genuine reason and provide adequate justifications. If there have been any unforeseen circumstances due to which you were unable to file the returns, communicate that to the loan officer.
- Review your banking activities
When you apply for a loan against property, the lender scrutinizes your bank account to take note of your banking habits. They do so to judge your spending habits and decide your creditworthiness accordingly. Before applying for the loan, review your bank account. Avoid having any discrepancies regarding minimum balance or insufficient funds. Having a record of sound banking activities can increase the chances of loan approval.
- Explore other financing options
You can look for other financing options like peer-to-peer lending or crowdsourcing for your financial needs. In such options, you can get a loan through crowdfunding at higher interest rates. If you do not have income proof, such options can be used for financing your needs. However, ensure that you read the terms and conditions carefully to know about all the hidden charges and aspects.
Taking a loan against property without income proof can be a difficult task. However, as income proof is not the only thing that lenders consider for loan approval, you still have chances to get a loan against property. You can use the above-mentioned tips to increase your chances of loan approval. Also, maintain a good credit score and check your eligibility before you apply.
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