Buying and owning a house is probably going to be one of the most crucial decisions you take in your life: a decision that is not only going to affect your life but of those associated with you too. Most of the population buying personal properties, find a home loan to be the best and safest option to go for.
For someone with no prior experience with a home loan, home loan interest rate, and everything associated with sanctioning of a home loan, you need to be sure that you know all the technicalities and complications associated with it.
So here are the 10 most searched queries regarding home loan and all that you must know about them:
ARE YOU ELIGIBLE FOR A HOME LOAN?
Firstly, you need to check this box on the list: Whether you are eligible for getting a loan? The banks and lenders check various factors and make sure that you are the right candidate to provide you a home loan.
You must make sure that you have the required documents; you must be older than a certain age; you need to be financially sound and have a good credit score. All this raises your chances of getting a home loan.
THE KINDS OF HOME LOANS
These are currently three major types of home loans available in the banking sector:
- ADJUSTABLE OR FLOATING LOANS:
This is the type of loan in which the interest rates are associated with benchmark rates of the lender or the bank. The interest rates vary in proportion to the benchmark rates. Thus they are not fixed.
- FIXED-RATE HOME LOANS:
At the time of sanctioning a home loan, the interest rates are decided during this procedure. The pre-decided home loan interest rate remains fixed throughout the pre-decided tenure.
- COMBINATION HOME LOANS:
Combination home loans propose elements of both: the fixed home loan interest rates and the floating home loan interest rates.
LOAN BEFORE HOME
A question that ponders our minds generally is: Whether to buy your property before or after applying for a loan?
The answer is quite simple: go for the loan first. You should get your home loan pre-approved for various reasons. Once you get your home loan approved, you get a complete idea of your budget and the amount of money you are spending. You get an idea of the taxes, maintenance, and upgrading charges, and also prevents any hidden charges later on.
Pre-approved loans are preferred for a better plan and also help you in choosing a perfect location. Very often, lenders and banks collaborate with certain companies and builders and provide better home loan interest rates and faster procedures.
KNOW YOUR HOME LOAN AMOUNT
Be sure to know your home loan amount that you are going to be granted before-hand in order to manage your costs and budget. Most of the banks provide a home loan of approximately 75- 90% of the total amount of your property. You can also include a co-candidate to increase the chances of your loan being granted. This also splits the repayment amount and the interest rate.
Before getting involved with any business with any bank or lender, make sure there is complete transparency in the procedure and the paperwork. Most of the hidden costs are often hidden in the fine print. Proofread the paperwork thoroughly so that there are no further complications. Choose the type of home loan interest rate wisely.
TENURE OF THE HOUSING LOAN
You can select the tenure of your home loan during the application process, or some banks also give out flexible tenures according to your needs. The maximum tenure limit is 30 years.
This is a complete guide for a home loan. Take the decision sensibly for this can either be a wonderful experience or a thing you would regret later on.
Buying and owning a house is probably going to be one of the most crucial decisions you take in your life: a decision that is not only going to affect your life but of those associated with you too.