4 Things That Can Affect Your Housing Loan


By R. Safdar

Providing affordable housing to most of the people need to be considered as a social welfare matter and the policies associated with the housing markets should be given a serious look. Neglecting the importance of this sector could lead to the economic issues.

While buying a house, housing finance is a way which eases the buying process, although there are several conditions which need to be review before the approval of the housing finance.

Here are the 4 things that can affect your housing loan:

1. Creditworthiness of borrower

Borrower repute is one of the selection criteria for the pre-condition of housing loan by the lenders. It is necessary for the lenders to have complete knowledge of the creditworthiness of the borrower. This is the only way of successive business. In this regard, an accurate source could easily provide the borrower’s credit history. In this way, the lender can analyze the positivity and negativity in the transactions carried by the borrower.

2. Evaluation of Property

The updated knowledge of the market value of a property is essential. An efficient housing market would always maintain a record of housing transactions. The maintained records carrying the price based on size, location, age, designing and material cost etc can accurately value the property for both borrower and lender.

3. Collateral Security

Collateral security is an important condition set by the lender. In any case of failure to pay the loan, the lender has legal rights to seize the property. House its self is a property, therefore this could be seized until the lender receives the loan money.

4. Inflation Risks

Housing finance also depends on the economic stability of the environment. Under the unstable economic environment, the lender is at high risk of financial loss and passes this loss to the borrowers. Such kind of risks is a hindrance for the development of housing finance systems. High volatility in inflation may either destroy the business of lender or it may affect the borrower as they would not be able to return their loans.


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