Purchasing or building a home is an important dream for many of you in India. Are you one of those looking to purchase a dream home? It is not possible to have a lot of savings or liquid cash to purchase a home. Thanks to the home loan option that permits you to purchase a home of your choice. Many financial institutions and banks are available in India to provide you with enticing loans in the real estate market.
Home loans are even called mortgages. Lenders finance home loans, but both lenders and brokers serve on behalf of lenders to generate information and process the same. However, you must be stress-free and careful in collecting all relevant info before choosing any loan offer. It is crucial to understand all repayment terms, factors, and conditions. Once you make up your mind, the next important step is to get funds to make the down payment. Note that no matter whether it is a home loan in Lucknow or a home loan in Kolkata, it is a must to go through the terms and conditions to select the best home loan deal.
Availing of a home loan can appear a daunting task, but it can be made simple by keeping a few crucial things in mind. Read on to know –
9 crucial must-follow tips when availing instant home loans –
Check your score first
Many financial institutions provide the best home loan deals to individuals with strong credit profiles and scores. A strong credit score guarantees lenders that you are a preferred candidate for a loan because you, as an applicant, show a good financial history and record. So, what must you do to make sure that you hold a strong credit score to be eligible for a good home loan deal? Firstly, get a credit report copy to see what your profile appears like to potential lenders. If you are aware of this, then you must take crucial measures to ameliorate your score. There are various online lending portals to fetch your credit score for free.
Ensure income or job stability
Your savings, net salary, expenses, history, and spending patterns are factored in to arrive at the acceptable EMI constituent. Lenders consider 40-50 per cent of your income as savings, which you must pay towards loan EMIs. As a home loan deal is a long-term obligation spanning up to 30 years, it is a crucial criterion that you must consider. However, equally crucial is your job as well.
Also Check: Home Loan in Kolkata
There are many of you who often get emotional regarding home. However, the decision to purchase a home must be practical and out of the box. Purchasing your dream home must not eat up all your savings. Thus, you must ensure to review beforehand to know if your EMI and down payment are as per your limits. The down payment that you look to pay must be planned so that you still hold all the money to mitigate any kind of exigency. While the loan EMIs are planned to not surpass 40-50 per cent of your overall income and must be factored in by the basic existence law.
You must know the rate of interest.
Do your due diligence and research linked to the rates of interest of different banks to figure out whether they are available at fixed rates or floating rates. The fixed rate of interest stays the same across the loan repayment tenure. However, the floating interest rate differs based on market fluctuations. While the floating rate of interest can, at times, be higher as compared to the fixed rate of interest, the amount that you must pay at the floating rate of interest is less as compared to the fixed rate.
Go through the thorough loan agreement.
In case you are looking to avail home loan from any of the financial institutions, ensure to read as well as understand all that is written in the home loan agreement before moving forward and signing the final deal. It is crucial for you to observe all the terms as well as conditions at least. While you do not have a lot of flexibility to change the same, still do not assume that no error can happen with the same.
Ensure all your financial documents are fine
There are various financial documents that you may require holding as well as provide while placing an application for a home loan. Keeping such documents handy in an orderly manner can assist you in speeding up the process.
Begin by saving adequately for a down payment
∙ It is crucial for you to plan out your finances when you are in the procedure of purchasing a home. Your month-on-month budget must put away a substantial amount, as this amount will go towards a down payment. Down payment may range anywhere between 2.25 per cent and 20 per cent of a home’s buying price based on the loan type.
∙ In case your budget does not permit you to put a huge amount as a down payment, then an excellent option is to provide a lower down payment and start with the repayment of the home loan. Whenever you get surplus funds, you can make a prepayment of your home loan.
Enhance bridge financing
As a loan applicant, you must pay a specific amount of your overall cost out of savings or salary. It is recommended to pay as much as you want in the form of a down payment that interest paid on the principal is very lower.
Besides loan EMI, there are a few other administrative fees or charges that financial institutions may charge you while you file out a loan application. You must ensure to discuss this with your lender before you apply for a loan. Here, you must check out if such fees are monthly or one-time. In the case of monthly fees, you must ensure to factor in this along with your home loan EMI. Doing so would allow you to make an informed decision.