Get your home loan approved with 8 techniques you should know before buying a home

Previously, we talked about the reasons why home loans are not approved. This time, we will talk about techniques that will help you get approved for a home loan or condo loan clearly, or in other words, prepare yourself before applying for a home loan or condo loan.

Most people who are going to buy a house or buy a condo with a down payment still have time to prepare. However, many people who buy a house or condo ready to move in (especially single houses, which are mostly ready to move in) do not prepare themselves before applying for a home loan, which results in not being approved or not being approved for the full amount they want.

Techniques for loan approval
Before applying for a loan, you should prepare yourself. The techniques for loan approval are as follows:

1. Evaluate income
   You should choose a home that is appropriate for your income so that the loan amount is in line with your income and repayment capability. Whether you are a single borrower or have a co-borrower, you must consider the total income of the borrower and co-borrower, their expenses, what they are paying for, and their ability to repay. You should not choose a home that is beyond your means or beyond your ability to repay, and you should not take out a loan that exceeds your means.

2. You should have savings.
   Home and condo buyers should have at least 10% of the property price saved up in case they cannot get the full loan amount so that they can pay the difference or use it as expenses on the day of the transfer of ownership. Home and condo buyers should not hope that they will be approved for the full amount or have the difference to use as expenses on the day of the transfer of ownership.
   In many cases, buyers do not have any savings and cannot borrow money to pay the difference when they cannot apply for the loan amount they want. For example, if a house is priced at no more than 3 million baht but can only borrow 2.5 million baht and cannot find the difference of 500,000 baht, they may have to let it go. However, if the house is purchased with some down payment, sometimes they will inevitably have to pay the down payment. In cases where the borrower has a large difference and borrows less money, the chances of being approved are even higher.

3. Create a good financial history
   In the case of permanent employees, even though they have a higher chance of being approved than freelancers or permanent employees who do not have a pay slip, they still need to create a good financial history. Of course, you have to start with the income history from the bank account book that you receive your salary.
   Before applying for a loan for 3-6 months, you should have at least 500-1,000 baht remaining in the account. You should not withdraw 100% of the money immediately after your salary is paid. In other words, as soon as your salary comes in, you withdraw it all right away. This will make your account statement not as good as it should be.
4. Create a good financial history
   People who are self-employed and have an uncertain income are already difficult to borrow. If there is no income history through a bank account, the chance of getting a loan is 0. Therefore, self-employed people should continuously deposit money into their accounts and keep a record of income and expenses (to be sure, you should have at least 6-12 months before applying for a loan) to use as income documents when applying for a loan.
   As for people who are permanent employees but do not have a pay slip, which is mostly people who work for family companies or partnerships and receive a salary in cash, they should create an income history by depositing this cash into their account every month for at least 6-12 months before applying for a loan.
   When it’s time to borrow, have the company, business, or employer that the borrower works for issue a salary or income certificate for the borrower as a component along with the bank statement figures (if there is a history of the business that has been in operation for a long time and is a sustainable business to show the stability of the income, it will increase the credibility of the income both in the present and the future).
5. Clear all debts
   Let’s talk about general debts first (still normal debts, not outstanding debts that are blacklisted in the credit bureau report). You should clear all debts, especially debts from installment payments, before applying for a loan. It would be better to clear them 3-6 months in advance because, during that time, the banks will send a report to the credit bureau showing that the debts have been cleared. However, if you just cleared them a few days before applying for a loan, they will not show up yet, which may be a little risky.
6. Avoid having a history of late payments.
   If you have a history of outstanding debt, the financial institution will send you true information to the credit bureau. If you have not paid, the financial institution may assess that you may not be able to pay your debts in the future. In the case of having a history of late payments and having just cleared them before applying for a home loan, the chances of not getting approved for the home loan are also high. In the case of having cleared them for a while, there is still a chance, depending on the discretion of the loan approval officer.
   In the case of buying a house or condo in installments, having a good history of paying the down payment throughout the installment period, with no defaults, including a good history of paying off various debts after clearing bad debts, will increase the chances of being considered.
7. Don’t accidentally make installment payments before applying for a loan. This is an important prohibition. Before applying for a loan for 3 months, you should not rush to make installment payments for any products. Whether you make small or small installment payments, you should not do this because it will cut off the opportunity to get the credit limit as targeted.
8. .Prepare documents
   This is also important. Before applying for a loan, if the borrower has prepared all documents, including income documents such as salary certificates, pay slips, income history documents, bank statements for at least 3-6 months, etc., documents related to the borrower, such as copies of ID cards, copies of house registration, documents regarding name changes or marriage, etc., the more complete the documents are on the loan application date, the faster the approval will be.

Home loan not approved, refund or not

If in the end, after trying every means, and still not approved, the reservation money, contract money, and down payment will be lost or not, depending on the conditions of each project, which are different. Some projects will refund 100%, and some projects ask for an 80% refund, depending on the consideration of each project. All conditions should be agreed upon before deciding to put down the reservation money, contract money, and down payment, to avoid any problems later. It may be necessary to specify in the reservation contract how much money will be refunded if the loan is not approved and how.