Buying a home can be a fun and rewarding experience. It plays a pivotal role in buying a property or apartment. But finding the right home which fits your pocket is just one step away in the process. Before applying for a Home loan, ensure you know how much loan you can afford. At times, the process of applying and obtaining a home loan can be complex and frustrating. To avoid inconvenience and saving cost, you must select the right home loan which can be just as important.
Process of Getting Home Loan Finance
Research and Prepare Yourself : Now-a-days home loans are made attractive for the buyers with lower interest rates and additional schemes. Therefore it is necessary to educate yourself about the terms and conditions of each loan agreement beforehand. Refer to the local newspaper’s real estate section and visit online sites for getting more information about home loans. Clear all your doubts relating to any home loan scheme and ask questions from the sales person for getting a proper clarity in understanding a difficult clause.
Determine your Home loan affordability : How much home loans you can afford? This is the most important question one should keep in mind before preparing oneself for availing home loans. Since you will be expected to spend around 20% of the property value that you desire to buy as a down payment to the developer. Remaining 80% can be obtained as Home Loan. More expensive the property is, bigger the loan amount you desire, and so you have to pay more towards the down payment.
Income Stability : Home loans should be avoided in case there is a risk of losing or leaving your job. You must assess whether your income will be able to support the EMI on your home loan or not. You should analyze by taking into account your current monthly expenses, future expenses or in the case of emergency etc. When there is a likelihood of an interruption in the income, it might not be wise to consider a huge EMI obligation on yourself.
Types of Home Loan : There are many home loan companies which are willing to provide you as per your financial needs. It is, therefore recommended to consult an independent home loan expert or consultant before applying for a home loan or buying a property. There are numerous home loan schemes where you need to select the scheme or Home loan that accommodates your requirement. Sometimes loan rates fluctuate subject to its end use, so be informed about it before applying for such kind of home loan.
Loan Eligibility: Carry documents which consist of the information such as your credit history while applying for a home loan. You should have cleared all your payments of credit card bills and car loans on time in order to move to a higher step on the eligibility list when applying for a home loan. If you have a fair record in your credit history for payments made on time, then you can use it for your benefit when applying for your home loan. Also, pay attention to the tenure of your loan. If you choose a long tenure loan then you will be paying comparatively more depending upon the higher interest rate.
Assess your EMI : Calculate EMI(Equated Monthly Instalments) that you will be able to afford in advance. Everybody knows better about their money than anyone else, so keeping into consideration your current job and income, you can do an approximate calculation of the amount of EMI payable. Don’t take hasty decisions because penalty imposed due to non-payment of EMI on time can prove to be more cumbersome. If you have a temporary job, so it’s quite obvious, things would be different and that too should be taken into consideration before making a wise decision.
Negotiate on the interest rate : As banks and financial institutions know that interest rates are negotiable, still there lies a possibility of making a few adjustments, if you highlight a few honest issues with the high rates. This can be possible only if you have finalized the property you wish to buy and you need it as soon as possible. If it is an end of the month, it could stand beneficial for you. Salespersons have an aggregate number of sales that they are required to finish it every month. In order to fulfill their target, they are bound to provide you certain benefits.
Evaluate Credit History: Credit history reveals how an individual manages his/her credit. It consists of the information on your borrowing and repayment of credit cards, bank loans, car loans, mortgages and any other debt obligation on a creditor. The credit history is used by the lenders such as banks and credit card companies, to assess the probability of risk posed by lending money to consumers and to diminish the losses due to bad debt. If credit history turns out to be in favour of you, the lender may even agree to grant you a loan for a higher amount at a discounted rate.