Price of houses is skyrocketing these days, and it’s impossible to purchase a property by dealing in cash. Taking traditional finance is like a trap and borrowing from friends and family members will always have a fear of bringing a rift in the relationship if not paid on time. Therefore, it’s common for many of us to take home loan from banks and financial institutions. Due to the attractive interest rates, home loans are now available at cheaper price. The process of online application has made approvals and disbursals at quite faster pace.
Once the bank or financial institutions scrutinize your documents well along with credit history, check your borrowing potential you will be eligible for a certain loan amount.
If you’re planning to apply for a home loan, here are few things you should follow for smoother processing:
Check your loan eligibility: Lenders who offer home loan have a list of eligibility criteria. After a thorough check of all these parameters, you’re considered a potential borrower. Banks or financial institutes typically look at your credit history, income source any additional source, repayments habits of prior loans and then decide for a certain loan amount. The demographics to check would be age, occupation, margin money available, number of family members, etc. which are also important while determining the interest amount on the home loan.
Property Legality: Before you select your dream property, make sure the builder and the project you choose is reputed with all the legal papers in place. These days many people are being duped with uncertain charges on you avail a loan. Also, there are fraudulent projects being constructed for earning money. With RERA implementation, you can take a look at the builder’s profile online on their website. Banks or finance companies will definitely refuse to give loans if the builder is not on their approval list.
The Down Payment: Every bank or finance companies will finance 80-85% of your project, so the rest 15-20% has to be taken care off by the customer itself. Which means it’s important you must have a budget chalked out before you start looking for a new house? Calculate the down payment you will have to pay the loan amount you wish to take. Make necessary arrangements by the time you’re loan is sanctioned. Of course, you can choose to pay more if you can because the lesser loan you take, low would be interest rate and more manageable as well. Try to minimize the borrowing amount to reduce the interest outgo.
Fees and Charges for Loan Amount: A home loan has various types of fees associated with it. First would be the processing fee on loan amount. Pre-closure charges when you wish to close loan amount early. Late penalty charges when the monthly installment is delayed. Check if these fees are reasonable when you choose a lender.
Check the interest rates: Obviously, the interest rate on loans is a crucial factor while taking your home loan. Lower the interest rate, more affordable would be your monthly installment and more money you can save. Housing loans are offered at fixed rates and floating interest rates. Some finance companies give partial fixed-floating rates wherein the rates are fixed for the initial time of around 2 to 3 years and then it moves towards floating rate. So, it’s better to weigh your options before you zero in on a home loan.
Once the bank or financial institutions scrutinize your documents well along with credit history, check your borrowing potential you will be eligible for a certain loan amount.
If you’re planning to apply for a home loan, here are few things you should follow for smoother processing:
Check your loan eligibility: Lenders who offer home loan have a list of eligibility criteria. After a thorough check of all these parameters, you’re considered a potential borrower. Banks or financial institutes typically look at your credit history, income source any additional source, repayments habits of prior loans and then decide for a certain loan amount. The demographics to check would be age, occupation, margin money available, number of family members, etc. which are also important while determining the interest amount on the home loan.
Property Legality: Before you select your dream property, make sure the builder and the project you choose is reputed with all the legal papers in place. These days many people are being duped with uncertain charges on you avail a loan. Also, there are fraudulent projects being constructed for earning money. With RERA implementation, you can take a look at the builder’s profile online on their website. Banks or finance companies will definitely refuse to give loans if the builder is not on their approval list.
The Down Payment: Every bank or finance companies will finance 80-85% of your project, so the rest 15-20% has to be taken care off by the customer itself. Which means it’s important you must have a budget chalked out before you start looking for a new house? Calculate the down payment you will have to pay the loan amount you wish to take. Make necessary arrangements by the time you’re loan is sanctioned. Of course, you can choose to pay more if you can because the lesser loan you take, low would be interest rate and more manageable as well. Try to minimize the borrowing amount to reduce the interest outgo.
Fees and Charges for Loan Amount: A home loan has various types of fees associated with it. First would be the processing fee on loan amount. Pre-closure charges when you wish to close loan amount early. Late penalty charges when the monthly installment is delayed. Check if these fees are reasonable when you choose a lender.
Check the interest rates: Obviously, the interest rate on loans is a crucial factor while taking your home loan. Lower the interest rate, more affordable would be your monthly installment and more money you can save. Housing loans are offered at fixed rates and floating interest rates. Some finance companies give partial fixed-floating rates wherein the rates are fixed for the initial time of around 2 to 3 years and then it moves towards floating rate. So, it’s better to weigh your options before you zero in on a home loan.
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