HOW TO CHOOSE THE PERFECT HOME LOAN
Posted by Creditkaro
Festive season is almost at the doorstep and it is time for
the Indian households to take some big financial decisions. This time of the
year is auspicious in our country. And it is no secret that we are known to
spend big every festive season. The Indian market is designed in a way that
every festive season there is a sudden rise in sales across all sectors. Be it
real estate, automobile or any other industry. We Indians love to go big every
festive season. Many of you must be saving up your hard-earned money for this
season to arrive. So that you can start planning on your future dreams, who
knows? Maybe a dream house?
Owning a house is probably the biggest decision you will
ever make. We all dream about living in our own house, no matter how big or
small your house is, we need at least place in this world we can call our
‘home’.
If you are a first timer then this one is a must read for
you. It is very important that you know in and out of this whole process.
Because it is a long-term investment. It is a very steady procedure and should
be dealt with a very practical approach. So, let’s find out what all you need
to know before you apply home loan.
Different types of loan with unique structures are available
in the market:
FIXED RATE- In case of a fixed rate loans, the interest rate
is fixed at the time of disbursal of loan. It is constant throughout the whole
tenure of the loan.
FLOATING RATE- In case of floating rate loan, the interest
rate is based on the reference rate of the lender. Changes over the tenure
proportionately with change in the reference rate.
MIXED RATE– This type of loan is a combination of fixed and
floating rate of interest. So, one part offers fixed rate of interest and other
part offers floating rate.
PRE-APPROVAL– It is always advised that you must always
look for a home loan that is pre-approved. Pre-approval is secure because it
helps you decide your budget. This ensures that you can spend your time looking
for a property that suits your pocket. You get a better deal while doing a
negotiation.
LOAN TO VALUE RATIO– Loan to value ratio is the proportion
of the amount that your bank. Lender has agreed to finance excluding the down
payment which you will have to pay. According to RBI guidelines, banks can
finance up to 90% of property value for loans up to INR 30 lakhs. If your loan
is more than INR 30 lakhs. And goes over INR 75 lakhs, LTV ratio can come down
to about 75% to 80% respectively.
INTEREST RATE– Interest rate can vary between 9% to 12%
depending on the lender. However, a small difference in the interest rate can
have a significant impact on your loan. Therefore, it is very important that
you keep a watch on the interest rates of various lenders in the market. And
choose the one that offers the lowest.
CREDIT HISTORY– One of the most important factors that
effects your loan repaying ability is your credit score. A low score may
showcase a negative picture to the banks/lenders and may reduce your chances of
getting a loan. The importance of a good credit history is a bit relaxed in
case of home loan. But then it may lead to higher interest rates or a lower
loan to value ratio.
LOAN TENURE– Different lenders may offer different loan
tenures depending on the loan structure. Many banks/NBFCs may offer loans for
up to 20 years while in many banks the tenure can go up to 30 years. So, doing
proper research is essential> it will help you choose the loan tenure that
eases out the stress of repayment.
LOAN PROCESSING TIME– Processing time can also vary from
lender to lender. Look for a faster disbursal based on the urgency or
requirement.
EMI CALCULATOR– In this digital world, technology has
become so advance and practical. That you hardly must move out of your comfort
zone. You can just visit a comparing portal that is trustworthy and calculate.
Your EMI with the help of an EMI calculator. You can calculate your EMI here.
Now that you are familiar with the types and factors. That
have an impact on your home loan, it is important to check the eligibility.
Lenders will assess your ability based on your income, repayment capacity, age,
qualification. financial status number of dependents and job stability. Make
sure that you fulfil each criterion and have all the documents necessary to
apply for the loan.
Acquiring a home loan van be a complex procedure and
requires. Thorough assessment because it is a decision that may last a
lifetime. It is important that you stay updated with all the necessary
information about an investment this big. If you want to check out the best
deals on home loans, click here.
We at CreditKaro believe in making your life easy and so we
do all the market research on your behalf. Bring you all the updates and facts
from the market directly to your screens. In case you are thinking of applying
for home loan, do keep in mind. That your credit score will act as a prime
player. To check free credit score online, click here. If you want us to write
on a topic of your choice. You can write to us and we may feature your topic in
our next blog!
Till then…happy buying!
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