Whether it is purchasing a new home or refurbishing your old abode, home loans can help you a lot in terms of finance during these important events in your life. No matter if you are a first-time loan taker or not, the process nevertheless might give you sleepless nights.
Below are 5 tips to help you keep the process smooth and hassle-free both for yourself and the bank.
1). Keep your documents ready
The first thing before applying for a home loan is to keep all your required documents ready and organized. The loan providers usually require your KYC documents such as Aadhar card, PAN card, passport, voter’s id, driver’s license, etc. Other documents which are required include your past 3 month’s pay slip, 6 month’s bank statement, and income tax returns.
2). Get your CIBIL report
The next step would involve checking whether you have a good credit score or no. Lenders ask for your credit rating to know whether you have the financial capability to pay back the loan taken. On an average, a CIBIL score of 750 and up is considered excellent by loan providers. If your credit score is lower than that, simple measures like taking the support of experts and bringing small changes to your financial behavior can help improve it.
3). Are you qualified to take the loan you need?
If you have a good credit score, you can go ahead with the pre-loan application preparation. The next step involves checking whether you qualify for the loan that you are looking for. There are various criteria on which this loan qualification is ascertained. Some of them include your age, experience, type of employment, and minimum income.
4). Estimate your eligibility for a loan
If you have cleared all the criteria needed to qualify for a loan, then the next thing would be to evaluate whether you can afford the home loan amount you want. You must be excited to get your new home or your existing home done up and might end up taking a loan amount which you will later realize is out of your financial capabilities. Half your life will bear the brunt of this error. The easiest way to know about your loan eligibility is by using home loan eligibility calculators.
You can find these calculators on any lender’s website and use for free. Based on your income, savings, the interest rate on your loan, and loan tenure, the calculator will tell you which the right amount for you to borrow is.
5). Find out the rate of interest on the loan you are taking
The last and final step before you sign the deal of a home loan with a bank, you need to find out the rate of interest the lender is charging on the principal amount. This will help you compare between lenders and see which one is perfect for you based on your affordability.
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