Home loans made easy
Searching for a home that checks all the boxes in your wish list is a difficult task in itself. Amidst this exercise, finding a home loan that matches your requirements can be quite a lot of work. In today’s world, high property rates stand in the way of buying one’s dream house and in such a scenario, home loans provide great financial support. However, availing a home loan is not as easy as it is made out, especially more so if you don’t know the various processes and formalities involved. Apart from this, there are also chances that you may get duped. Here, we have listed a few important things that one should be aware of while searching for a home loan.
One of the most important steps while applying for a loan is identifying the right type of loan that suits you. Since the internet is available right at the tip of your fingers, you can easily research the various home loan options available. It is important that you take into account your present income and affordability before deciding on how much loan to apply for. A stable income is necessary for your loan approval and to pay your EMIs on time. Calculate your loan eligibility and your financial ability to repay the loans. Search for a good bank with a solid reputation or a housing finance company that offers timely loan sanctions.
Check your credit score
In order to avail a home loan, you should maintain a good credit score, which is an essential parameter upon which depends whether your loan gets approved or not. Institutions such as CIBIL, CRIF, Experian, Equifax, measure your credit score, which should be more than 700 for you to get the loan approved. Check for any pending credit card dues or loan repayments before applying for a loan. A good credit score not only helps you get home loans with ease but also helps in getting loans of a higher amount with better interest rates and improves your negotiation power.
Loan tenure is the duration for which one has to pay the loan. It’s better to calculate and decide your home loan tenure well in advance. Home loans usually vary between five and thirty years. While a loan for a duration of 25-30 years may feel comfortable, it’s important to know that longer tenure comes with a higher interest amount. A longer duration will mean low EMI, whereas a short tenure would mean heavy EMIs. Many people try to avoid paying heavy EMIs and choose a loan option for a longer duration. While, it may seem like a feasible option at present, in the end, you are left paying more interest than required and with loan sharks on your head for many years.
Banks give you the option of choosing an EMI of your choice. The loan tenure and the interest rate determine the amount of your monthly instalment. Search for a lender that offers loans for a lower interest rate. Interest rates can be both fixed and floating. Fixed rates are usually higher than floating rates. However, these rates are not affected by the fluctuations in the market. Hence, according to your will, opt for either of the two options. You can also search online and check the various home loan plans. This way, when you actually apply for a loan, you have a rough idea in your mind about what you are getting into and there won’t be any confusion.
Getting all your documents in order before applying for the loan is the final step. Therefore, you must pay attention and read all the terms and conditions in the agreement before signing the document. You should also be aware of the different fees, charges and penalties that are mentioned in your agreement.