A home loan has become one of the great necessities nowadays. Since the price of houses is too high, especially for the middle-class people, savings would require a lot of time to touch that amount. On the other hand, a home loan would ease your burden by financing you the required amount. While there are various eligibility factors one should pass for a home loan, there are some key points as well, which will help you decide the best option. You should always remember to negotiate the new home loan interest rate before making any final decision regarding the purchase.
So, when you search for a home loan, these points will help you come across the best option for you:
Decide the amount
The price of the home you are looking to buy should be the most important factor. Since your monthly EMI will depend on the principal you borrow from the lender; the principal amount should be decided accordingly. Further, you will also to check if the total amount should be enough for other relates expenses such as the interior of the house.
Check your Capacity of Payment
Out of the various home loan offered by different lenders, all you will need to stick on is your ability or affordability. Mainly, the lender will provide you with a specific amount based on your income. So, you should also know how much you can afford for monthly installments.
Go for a better rate of Interest
Since the rate of interest varies from bank to bank, you should go for the least interest rate. Generally, thehome loan interest rate ranges from 11% to 18%.
Based on the tenure of repayment, both rates of Interest and monthly installments are decided. If you go for a smaller monthly EMI, it will harm the rate of interest.
Check for the Foreclosure Norms
Checking for the foreclosure policy of your lender will help you in many ways. Firstly, there should a specific time after which the bank would allow you to go for foreclosure. Secondly, you will also need to check the additional fees or charges related to the foreclosure. Besides, this will also benefit you by increasing your credit score.
Apart from the monthly installments, a home loan may feature processing charges, service charges or other administrative that you lender would impose on you. It is always better to check for all the additional charges that might come with your home loan.
Go through Clauses and Conditions
This is one of the main things which is usually ignored by people. Even if the documents are lengthy, you must do a thorough check to see if there is any unnecessary clause.
Since a home loan has become of the great necessities, a lender usually offers hassle-free processing. But before you can apply for a home loan, you will also require to have all your documents ready. These home loan documents will include your income proof, bank statements of the last two or three months, your identity proof, address proof, age proof, etc.
If you work for a reputed company or with a reputed brand, your chances of eligibility would be better. However, your income will be one of the most important factors which will decide whether you are eligible or not. Also, you must research well if you are going to borrow a home loan.
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