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04 November 2011

Why is my Lender Asking So Many Questions for Verification of Home Loan

It is but obvious when you go in for applying for a home loan that the lender will first view you very critically and carefully. Why? You have a good job, you and your spouse may both be working, you may also have a vehicle of your own, but still whenever you first go and ask for a loan you are under the hammer!
It is true that you may be financially secured and has your finances in place but the lender does not know this. For them you are another new borrower whom they have to view critically and judge about your financial repayment capacity and long term decision of a home loan. You will be asked so many prodding questions, which you feel may look irrelevant to your loan , but the lender here is trying to judge your financial habits. Your financial habits means your spending habits, whether you are lavish and extravagant in spending,, whether you are practical in spending. This will help them understand your financial habit, whether you are the saving and sparing type or the extravagant and emotional spender type. You also may need to answer questions regarding your family members and earning members in the same along with the number of dependents. All this may look irrelevant now but imaging over the years since home loan is a long term commitment the lender only needs reassurance that you will sincerely pay back the loan amount on time.
You may need to answer questions which may seem personal like when did you join your job, since how many years you have been working in this company and how many jobs did you have in the previous years, that is do you job hop often or you are steady on your job. All this will help the lender understand your financial habits and commitments and as they enquire about your other loans and home expenses they are just trying to converse with you to understand you financial position and repayment capacity. They want to understand that you w ill be committed for loan term , if the case of joint home loan then they will consider both you financial background and qualifications as well as your parents financial history.
They are just waiting to understand and bet upon you and looking for that one element that you can repay the amount taken as loan, along with the interest amount, and that too on time! and you get your home loan approved in no time.

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