Things You Should Know Before Applying for a Home Loan
Buying your own house is a lot more than just a financial commitment; it has a lot of emotions attached to the decision. However, to keep a robust monetary corpus aside for medical emergencies, and other commitments and requirements; the decision of buying a home sometimes takes a backseat. But, thanks to ‘Home Loans’ the dream of owning a home has become a reality now for many.
However, rushing to apply for a home loan is never advised and one needs to indulge in proper planning and homework ahead of time.
If you’re planning to apply for a home loan, you need to keep a lot of things in mind; right from planning your short and long-term financial goals, selecting the right lender, keeping your credit score healthy, and more. These little preparations will make sure you never make a compromise on your requirements.
Here are a few things you should know and work on before applying for a home loan:
Keep Your Research Strong
This is the first and one of the most important things to know when you are applying for a home loan. You need to research a lot on several aspects – availability of lenders offering home loans, interest rates offered by them, eligibility criteria, terms and conditions, processing fees, and foreclosure charges.
Visit the online portals of select lenders and know about their offerings. You can take down notes and select the one that is closest to your requirements and budget. Skipping this step can be a big mistake that can make you miss out on some great home loan interest rate offers.
Check Your Credit Score Online
A good credit score is your key to unlock vast financial opportunities including a hassle-free home loan approval. When you’ve shortlisted the property and are in the process of applying for a home loan, do give your credit score a check. A score of 750+ is considered great to get you better offers on home loan interest rates and immediately qualifies you to be eligible for a home loan.
If your credit score is on the lower side, do take measures to build it up. Improving your credit score is as crucial as having a healthy heart in a healthy body. Ignoring it can cost you extra money on higher interest rates on home loan and loan application rejection too.
Aim at an Affordable & Workable Home Loan EMI & Tenor
Anyone who’s working upon to apply for a home loan should first consider deciding the home loan tenor. Your home loan EMI and the loan tenor are inversely proportional to each other; longer the tenor, lower the EMI and vice versa. Make sure when you are working upon the calculations of Emi to choose a loan tenor that fits your short-term and long-term financial goals. Consider additional avenues of income that may open in the near future and decide the loan tenor accordingly.
Interested in knowing your estimated home loan EMI? Click here to check with our Home Loan EMI Calculator.
Home Loan Processing Fees & Foreclosure Charges
Home loan processing fees is a small percentage of the sanctioned amount that is to be paid by the borrower to the lender when the home loan application is accepted. The processing fees varies across different lenders and you need to select the lender that offer nominal home loan processing fees as per your requirement.
Likewise, check for the lender’s foreclosure norms before applying for the home loan. Foreclosure charges refer to the charges levied by the lender if you wish to make the outstanding payment to close the home loan account. Following revised RBI guidelines, banks and lenders can’t levy any foreclosure charges on home loan.
Down Payment on Home Loan
A home loan borrower should be aware of the fact that banks and lenders usually approve up to 90% of the home loan amount applied. Balance amount, also called as down payment or margin money, is to be borne by the borrower.
The rest of the sanctioned amount is then converted into EMIs. If you have additional funds, it would be advisable to utilize that in increasing the down payment to save you considerably on home loan interest rates.
The points mentioned above should help you in preparing better before applying for a home loan. Having complete information about home loan ensures you end up having a smooth and hassle-free home loan experience.
If you the dream of owning a home, we can help turn that dream into reality. For queries on Home Loans from Clix Housing, give us a call on 1800-200-9898 (toll-free)* or write to us at firstname.lastname@example.org.