Things to clear up before applying for a house loan

Getting a home loan isn't just about financial readiness. There are many other factors that need to be addressed, or the outstanding balance minimized, before applying for a home loan. Therefore, before preparing for a loan, we must start by managing these things first.

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Clear Your Debt

If you have existing debt, whether it's credit card debt, car debt, or even past due water, electricity, or phone bills, you should clear them first or minimize the outstanding balance. Even though the amount may be small, a home loan is a significant sum. If you don't clear the smaller debts, you may forget about them, which can accumulate and have negative consequences in the future.

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Maintain a complete bank statement

When applying for a loan with a financial institution, a bank statement is one of the documents reviewed to assess your recent inflows and outflows. Therefore, it's important to organize your accounts to build your credit.

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Thoroughly plan your finances.

When applying for a home loan, it's crucial to have a cash reserve to protect against unexpected events. It's also important to assess your income to determine your maximum monthly repayment capacity.

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Build your credit.

Credit is the most important factor when applying for a loan, regardless of the amount. Therefore, before applying for a loan, build your credit. Regularly checking your credit bureau is another way to gain a detailed understanding of your financial history.

What do you need to prepare before buying a home?

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Prepare information and a list of housing projects.

Look for suitable housing projects and locations, taking into account your surroundings and the price range that's right for you.

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Prepare loan application documents.

To ensure smooth loan approval, documentation is crucial. Prepare documents that will enhance your credibility and strengthen your credit. These documents include payslips and bank statements. Credit Bureau reports, etc.

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Prepare for a down payment

Sometimes, when applying for a loan, institutions will approve 80-90% of the total loan amount, requiring you to put down the remaining amount. Therefore, to ensure your loan application is approved in one go, you should carefully plan your finances for the down payment. For example, if your loan amount is 1,000,000 baht, you can apply for 90% of the loan amount. This means you need to put down an additional 10%, or 100,000 baht.

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Prepare reserve funds for other household expenses.

Of course, just getting a home loan doesn't mean everything is finished. There are other household expenses, such as furniture and home decorations. We must not neglect these expenses.

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Article source: NCB