Today, several financial institutions have made it easy for people to purchase a property by providing home loans at affordable interest rates and flexible repayment tenors. However, before finally applying for a home loan, borrowers should consider a few factors.
What are the factors to remember before going for a home loan?
These are the factors that one should keep in mind while taking a home loan:
1.Application process
Borrowers must conduct research on the home loan process and know the steps they need to follow. This way, they can streamline the process better, and it will help them prepare themselves better mentally.
2.Aiming at affordability
Even though there are many different house loan options available, loan applicants must first assess their affordability before applying. In addition to being able to pay the fixed monthly EMIs, one should be able to comfortably fit the repayment within his/her standard of living. Moreover, individuals must keep a consistent revenue stream to cover any unanticipated emergencies and take into account other unforeseen costs in addition to the EMI they choose to pay each month. Individuals can use a home loan EMI calculator to get an idea of what their monthly payable can be.
3.Impact of credit score
Maintaining a good credit score is a prerequisite for qualifying for any type of loan. Regularity pays well, whether it’s making cyclical credit card payments or loan repayments. If individuals maintain a CIBIL score over 750, they may be able to negotiate even lower interest rates for their loan. In addition, there is a far better probability of quicker loan processing and disbursal.
4.Type of interest
While applying for a loan, individuals should choose lenders with the most affordable interest rates. Though different factors affect lower interest rates for borrowers, it is essential for them to choose between fixed and floating interest rates according to their benefits. One can take the help of representatives of financial institutions to get better assistance on this.
5.Eligibility factors
A borrower’s eligibility for a home loan will be based on a number of factors, including his/her income, age, credit score, loan term, and so on. Although income will be a significant factor in determining the loan amount, borrowers can always include their spouse as a co-applicant and show their income. This significantly improves the eligibility for home loans.
As a borrower, one can use home loan eligibility calculators to determine their eligibility for a home loan or request that the lender performs the calculation based on their particular needs. However, before making a decision, it is advised to speak with different lenders to determine the ideal house loan amount.
6.Documents required
Before applying for a loan, borrowers should conduct a thorough research on the documents they need for a home loan. Then they need to gather the documents and keep them ready for submission.
7.Knowing foreclosure norms
As a borrower, one should check the changing RBI norms and also ask the lending institution about any foreclosure or pre-payment charges. This way, one can plan whether to pre-pay a loan amount or foreclose the loan.
8.Pre-approved offers
Borrowers must also check their pre-approved offers on the websites of the financial institutions by entering their names and contact numbers. Several financial institutions provide these offers on financial products like home loans and loans against property These offers expedite the loan application process by making it hassle-free.
Other than these, while choosing a lender for a home loan, borrowers must check its authenticity, ask for suggestions from people and check online reviews before settling on a lender.
