Buying a home is one of the biggest financial decisions for all. Having a home is still a big dream for many people in India and banks are helping them in achieving the same by providing the required funds in the form of a home loan. Availing a home loan is not an easy task as many people are not aware of the formalities. Those who are looking for a home loan should be aware of several associated things such as credit score, interest rate, documentation, fees and much more.
Buying a home is a one-time decision in the whole life, so you must pay attention to each and every associated thing so that you can get the right loan at the right time. As an applicant, you should be aware of basic components. Here are a few most common things that you should consider while availing of the loan.
Things to consider while availing a home loan:-
Credit score refers to be the most important thing when it comes to avail loans. It is an essential factor that banks check before offering any loan amount to its customers. To avail a home loan, it is important that your credit score is more than 750. And to keep your credit score stable, you must pay all dues on time and make credit card payments on time.
Before availing a home loan, it is better to check the interest rate of multiple banks to ensure you are getting the right one. There are basically two types of interest fixed and floating. Under the fixed home loan, the interest rate does not vary over the fixed tenure. But in the case of floating home loan is calculated according to MCLR and several other changes that depict a fall in the interest rate.
While availing a home loan make sure you are getting the home insurance along with it. You must insure your home. By paying a nominal premium for your home insurance policy, you will be securing your home against unwanted emergencies. You might get it along with the loan as many banks add it with the loan amount.
Home Loan tenure
Pay attention to the tenure of your home loan that defines for how long you have to pay the EMIs of your home loan. Generally, banks prefer to offer shorter repayment duration. Shorter duration is also beneficial as it reduced the interest burden. With short duration, EMIs will increase but it will help you in reducing the cost of home loan
EMI is the amount that you pay monthly to return the loan amount to the bank. It depends on the loan tenure and down payment of the home as well. More the down payment, the lesser will be the EMI. It is advisable to make sure that the loan amount should not exceed 45 percent of your total income.
While availing any loan, it is important to go through the foreclosure norms. Like when you will be able to close the loan and how much will be the charges of foreclosure and much more. Banks normally charge for repaying the home loans before the tenure ends. In case of a floating home loan interest rate, the bank will not charge any foreclosure penalty.
Keep the above-mentioned points in your mind before availing a home loan. It is important to avail of the right kind of home loan product for your needs.
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