Picture taken from Grand Walini official website
Buying a house is not an easy case, but applying for a housing loan could be tricky as well. One thing you have to remember is that the process takes time, and sometimes longer than what’s stated on the advertisements due to some hiccups here and there. It can be stressful because some of the house sellers or agents could give you quite a headache by texting and calling you day and night asking when the house is going to be paid, and even threaten you with something like “There is someone who would pay higher” if you could not finish the payment on time.
However, I found many applicants who actually became the one causing the process to delay. We don’t want to be one of them, do we? Hence, to avoid it, check out the 4 tips below before you apply for a housing loan, to have a smooth process on your application.
1. Keep your history clean
Picture taken from Pinterest
One of the main factors that are taken into the bank’s consideration when they review your application is the condition of your credit history, because they would want to know if you were trustworthy to be lent some amount of money (or big), based on how you treat the other lenders. If the bank found flaws on your history, then your application would either get rejected, or get postponed because you will be asked to give some covenants to justify that.
For example, I had a customer who was found to have a collectability status of 3 for more than 3 months in a row, on one of his credit card history. When I checked with him, he said that he didn’t realize that he missed to pay the card annual fee because he just moved from his old house hence he did not receive the billing statement. We ended up asking him to pay the annual fee and send us the payment receipt. However, it took some time for me to get the approval from the management to continue the process with such covenant because of this finding, which made the process got a little postponed.
Remember, the credit history to be reviewed is yours and your spouse’s (unless you signed a prenuptial agreement that includes division of property of each party, then your spouse would be excluded). Hence, make sure you pay your billings on time, whether it’s your credit card, personal loan, auto loan, or your company loan, to avoid findings in your credit history that could be a hamper during your application process. Also, keep the payment receipt in place, thus in case you were asked to give one, you will be able to provide it straight away.
2. Complete the checklist
You will be informed (or you can actually find the information on the bank’s brochure) about the required documents for the application, which are as follow:
A. Personal documents
I’ve met some customers who submitted their documents partially, which delayed the process. For example, several customers had their personal documents submitted, but not their spouse’s; or only had one-month account statement and told me to proceed with available documents while waiting for him/her to complete the document.
Why would that be a problem? Here’s why.
Let’s say you told the bank to conduct the SID checking on you first while waiting for your spouse’s ID, which actually only took 1 day, then what? The bank would less probably move to the next process even if they found your SID checking clear, because your spouse might not be; and carrying on to the next process would just be a waste of time and effort should your spouse’s SID checking was found to be flawed.
Also, providing only part of the financial data like one out of the required three months account statement will not make the process go any faster either. The bank would not start the analysis until you complete the documents, and by failing to do so in your submission would cost you a delayed process.
3. Make sure that you meet the requirements
The general requirements for a housing loan application in this country are as follow:
You would better check if you complied to the basic requirements above, rather than having your application submitted only to be rejected later for an obvious reason. Remember, the maximum age requirement refers to the age of loan due. For example, if you were a 40 years old employee, then the maximum tenor for your application is 15 years old, unless you can submit a proof that the pension at your company exceeds the age of 55.
4. Don’t put all your eggs in one basket
It’s really okay to apply in more than one bank, because one might be less conservative than the other, while the other might have a better offer compared to the rest; but the main point is, you would want to have a back up just in case it doesn’t work with one bank. If everyone approved your application, then you will have a wide option to pick from, and a bigger room to negotiate for a better price.
5. Be proactive
Being proactive in following up the progress would also be necessary. Remember, you are not the only customer at that bank, and you might not the biggest applicant they’ve got now, which might put you not quite on their first (or second) priority. However, it doesn’t mean that you have to text the officer day and night. The bank would do their job no matter how much loan you are applying, but you can at least check the progress based on the timeline and try to keep it on track.
For example, if you submitted the complete application on Monday morning, then you could check on Tuesday afternoon if everything was okay and if they would go to the next step, which is appraisal (for secondary house) or straight to financial analysis (for primary house). Should there be an appraisal, ask the officer when they would conduct the survey and make sure that it is indeed done on the day the officer tells you. You don’t want to wake up 3 days later and ask if the application had been approved, only to find that the appraisal is yet to be done; because that will cost you at least another additional 2 days waiting for the surveyor to come to the house, and finish the report, and send the result, before the bank would go to the next step.
Those were the 5 tips on how to have a smooth approval process. Hopefully this article has succeeded in helping you understand what to anticipate and what to prepare in order to avoid the delay on the application process.