There is no doubt that the costs of houses are touching the moon and people are seeking a home loan from financial institutions. Well, home loans are now available cheaper due to the falling interest rates. Moreover, the online applications have made the process fast. But, for a home loan, you get approval only after banks check your credit history. Here you will find an assortment of the aspects that you must keep in mind while planning to take a home loan.
Legitimacy of the property
The foremost thing you should do is to ensure that the builder is reputed. Also, see if all the documents of the property are in place and property is legal. Do not forget to check the profile of the builder over the internet as it will help you to know whether the builder is authorized or fake.
Down payment
You might have jotted down the figures of your budget before you begin searching for a house. Now, what you can do is to calculate the down payment you would have to pay. The best thing you must do is to save up for the down payment as it will help you if there is a deficit. Although, you can borrow money from your dear ones but try to borrow less amount of money.
Check your eligibility criteria
When you get in touch with the home loan lenders, they will provide you with the list of eligibility criterion. They will offer you the loan, or in other words, you would be considered as a potential borrower, only if you meet all their conditions. Please note that banks often look at your loanable funds history and check your borrowing potential. By doing so, they will understand your repayment habits. Also, your occupation, income, age, etc. are also taken into consideration when determining the interest on the loan.
Check the amount
Do not forget to check the fees as well as charges associated with the loan. The thing is that the processing fee is the standard fee payable at the time of application. Make sure you see if the cost is reasonable when you pick a lender.
Check the rate of interest
The thing that comes into play is the rate of interest on the loans as it is a determining aspect in deciding where to take your loan from. Lower the rate is, lower would be the EMI outgo. Home loans are given at the floating interest rates and fixed interest rates. Floating interest rates change of lending practices of the banks. Fixed interest rates continue to be same for the loan duration. You may get into the dilemma that whether to go for floating loan or fixed loan. You can browse through the internet as volume has been written over the benefits on has over the others. Make sure you ponder on them before you pick any.
Check your affordability of paying EMIs
People often take up a burden when paying EMI. They think it would get easier with the flow of time as finally, their earnings would increase. Remember to consider the probability of not getting a raise soon. Well, you can make modifications in the tenure to increase or reduce the amount of EMI according to your affordability.
Get an insurance plan to cover the amount of loan
You might be aware of the fact that once you take the load, the balance liability falls on the shoulders of your family when you are not there. To save your family from the financial burden, you can buy mortgage redemption insurance cover when taking a house loan. In this, the cover amount will decrease when you repay the loan.
Shop around
There is no doubt that in today’s world; numerous financial institutions, as well as banks, are there, which give home loans that too at attractive interest rates. Before you buy a home loan, make sure to compare the rates along with the charges of all the available home loans, online. It will help you in selecting a loan that not only has the reasonable rate of interest but also has limited fees as well as charges.
