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A Step-By-Step Financial Guide to the Home Buying Process

Clix May 11, 2021


Buying a home is one of the biggest life goals for any consumer. It is the most sought after way to build wealth and retire with stability. However, the home buying process can be overwhelming and time-consuming, but thankfully, a home loan can help you manage the financial part at least. If you are planning to buy a home, this step-by-step financial guide will assist you to ensure success and get the best home loan deal available out there.



1.    Be Informed

Getting sufficient information is the first crucial first step towards preparing yourself financially. This information includes everything from the down payment to closing and moving costs. Staying informed about these aspects will save you money as you understand how to choose a home loan offer and help you avoid common mistakes.

2.    Check Your Credit Score

Before you apply for a home loan and before the lender makes a hard enquiry on your credit report. Take a look at your own credit score. You may do this for free here and know if you have a credit score high enough to get loan approval.

Most lenders ask for a credit score of minimum 725. If it’s less than that and you apply for a loan, you may end up with nothing but a loan rejection. So, check your credit score, improve it if it is low, and then plan your loan application. The higher your score is, the higher your chances to get an approval.

3.    Check Eligibility

This is one area in which many home buyers make a mistake while applying for a home loan. Although NBFCs have simplistic eligibility conditions that are quite easy to fulfill, you must still check them before applying to be sure. The reason for your loan rejection can be as simple as the age limit. For Clix Capital’s home loan, you need to meet the following eligibility conditions:

    • You must be minimum 22 years old at the time of loan application, and maximum 65 years old by the loan term-end
    • You must be a self-employed professional or a salaried employee
    • The combined income of your household should be a minimum of ₹ 3 lakhs per annum

So, don’t forget to check the lender’s eligibility conditions before applying for home loan.

4.    Choose the Best Lender for Your Home Loan

When you are ready to apply for a home loan, you will find several lenders, each claiming to be offering better loan terms than the others. Apart from the loan amount and the interest rate, there are several other things you must consider while choosing a lender, including repayment terms, fees and charges, eligibility conditions, documentation requirements, application and approval process, customer service, and others.

Compare one lender with the other and make an informed choice based on the information you gather.

5.    Decide the Loan Amount to Apply for

Clix Capital offers home loans of up to ₹ 2 crore, but that doesn’t mean you must apply for the entire amount available. You must stay within your budget while selecting a home to purchase. Use a home loan EMI calculator to get an estimate of your EMIs and ensure that you can easily accommodate that amount in your monthly budget.

Since you would be paying these EMIs for several years ahead, factor in your income and expenses and decide on a loan amount accordingly. Borrowing more than you can afford will only lead to a financial crunch and missed EMIs.

6.    Stay Prepared for Loan Costs and Other Expenses

Apart from the loan amount and interest rate, there are several other expenses related to home loans and property purchases. For a home loan, you have to pay for some other expenses, including processing fees, prepayment charges, home inspection charges, late payment charges, documentation charges, etc.

When it comes to buying a home, you have to stay prepared for several other expenses, including registration charges, stamp duty, moving costs, renovation, furniture, etc. So, stay prepared for all these expenses and apply for a loan amount accordingly.

7.    Choose the Right Interest Rate Type

The interest rate can be fixed or floating. A fixed interest rate remains the same throughout the loan term, while a floating interest rate keeps fluctuating as per the market rate. If you choose a fixed interest rate, your EMIs remain the same no matter what the interest rate is. However, if you choose a floating interest rate, your EMI amount may decrease if the market rate decreases, and increase if the market rate increases.

Some lenders like Clix Capital allow you to choose a fixed interest rate for the first 2-3 years of the loan term, and then it converts into floating for the rest of the loan term.

Plan your application using this guide and apply for a home loan from Clix Capital to purchase your dream home without any hassle.

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