Buying a /property is one of the biggest financial decisions that anyone can make. For most first-time home buyers, availing a home loan is the biggest challenge as they are clueless about the best option for them. Our experts here help you out with your concerns by guiding you through the 10 things you should know before you apply for a home loan:
- Check your home loan eligibility
- – Know the types of home loans you can avail and from which banks
- – Get your home loan pre-approved
- – Assess –
- the loan amount available
- the cost of loan
- the EMI payable
- the loan tenure
The first step you need to take is to make sure that you qualify for a housing loan. At the beginning, our agents will assess your eligibility for home loan on the basis of your income and repayment capacity. The other important considerations include age, qualification, financial position, number of dependants, spouse’s income and job stability.
As defined by the regulator, most banks provide a housing loan ranging from 75 to 90 percent of the cost of the property depending on your loan value. You can use a housing loan eligibility calculator to check your eligibility for home loan.
COST OF YOUR HOME LOAN
The cost of your housing loan is also a factor to take into consideration while assessing its suitability. The cost will include the interest payments, processing fees, administrative charges, prepayment penalties, etc. Ideally your home loan should have zero prepayment charges for adjustable/floating rate loans. You should also be able to convert your loan to a lower rate by just paying a nominal fee. When considering a home loan, ensure that there are no hidden charges. As per the regulator, lenders need to transparently disclose information about fees and charges on their website.
Documents needed for a home loan can be categorized as:
These include your identity and address proofs. Some documents that you can submit for this requirement include a valid passport, voter ID card, Aadhaar card, etc.
These documents help the lender assess your loan eligibility. If you are employed, you can submit your salary slips of the last 3 months; if you are self-employed, you can submit income tax returns along with computation of income of the last 3 years.
These documents include the agreement to sell, the title deeds, etc. The lender does a due diligence on the property based on these documents.
10 Things you must know before you avail a home loan
Did you know?
Home loan eligibility is primarily determined on the basis of your income and repayment capacity.
Types of home loans
Floating rate loans are popular due to the flexibility which they offer to the customers.
Home first or loan first
You can enhance your loan eligibility by adding in an earning family member as a co-applicant.
The rate of interest applicable on your home loan is the rate prevalent on the date of disbursement.
Cost of your home loan
You can apply for a home loan even before you shortlist a property.
Longer the tenure, lower are the EMIs.
All co-owners to the property will have to be co-applicants of the home loan. However all co-applicants need not be co-owners.
You can be in one location, buy a property in another location and service your home loan from a third location.
You can convert your fixed rate loans into floating rate loans and vice versa, by paying a small fee.
You get tax benefits on both, principal repayment and interest payment on housing loans.