Are you looking to buy a brand new home or want to construct your abode?
If yes, you can rely on the facility of home finance. If you have the required eligibility and can furnish a few basic documents, you may not have to wait for the loan approval.
Home loans can help you get a significant amount that you can repay over a longer tenor. It is also possible to enjoy home loan tax benefits on payments made towards principal, interest and more.
However, many people don’t consider a few factors while approaching their home loans.
On that note, it will be good to be aware of a few vital factors before availing of housing finance. Read on!
Shop around for the best loan offer
When it comes to apply for a home loan, you will come across many deals, making you confused about which one to select and what not. Hence, you may find it tough to find the best housing finance option matching your needs and budget. The best thing would be to land on a third-party website and compare all available loan deals. This way, you would be able to pick an offer matching your needs and the repayment capacity.
Check out the home loan eligibility
The next vital thing that many people don’t check in advance and face rejection is home loan eligibility. Thus, every prospective home loan borrower should ensure to check out the home loan eligibility in advance. The home loan eligibility factors and documents required are enlisted on the website of the lender you want to apply with. It is also possible to know about the exact home loan amount your income will support. It is possible via using the home loan eligibility calculator. The tool is available for free on a reputed lender’s website.
Maintain a robust CIBIL score
When it comes to any types of loans, the significance of the CIBIL score just can’t be underestimated. Your credit score lets your borrower know if you are a creditworthy applicant or not. If you have paid your ongoing loan EMIs and other bills on time, you will have a higher CIBIL score. A credit score of 750 or more is what is considered best by lenders to sanction your request. Also, a higher credit score means that you can avail yourself of the lowest interest rate. Enjoying a reduced home loan interest rate also guarantees the reduced EMI repayments.
- Know if you can afford home loan EMIs
The next thing to consider before applying for a home loan is to know if your income can support upcoming EMIs or not. Knowing if you can afford it will help you plan out your finances without issues. To do that, you don’t have to scratch your head and calculate things manually. It is because you can now use the facility of the home loan EMI calculator. Once you enter a few loan details, the online tool will display an exact home loan EMI amount.
- Repayment tenure
The overall time you take to pay off your sanctioned home loan amount is known as your repayment tenor. Your home loan EMI and repayment tenor are something that goes hand in hand. If you choose a longer tenor, it may lead to a smaller EMI amount. But in this case, the payable home loan interest rate charges will be higher. In turn, it will increase the cost of your loan. On the other hand, if you go for a smaller tenor, your loan amount may go up, but you can always save on interest charges. Overall, you may be able to reduce the cost of your housing finance.
You just went through some of the essential factors you must consider while approaching your home loan application. Considering them will help you approach your home loan with confidence.
Other than these aspects, you should know about the costs associated with the loan.
It could be processing charges, prepayment and foreclosure, default and late payment fees and more.
Some banks may also levy a few extra charges, and it becomes vital to be aware of them earlier.
You can get in touch with your bank or go through its website to be sure of how much to pay, when and for what.