As the lockdown affected the economy, we saw Banks and NBFCs slash interest rates on various loan products. One such product is Home loans. Rates have now fallen before 7.00% which is good news for many Indians who are planning to buy a house.
But wait, before you could pounce on this opportunity, we will place 5 questions in front of you. If you answer them clearly, you will be able to understand if you must buy a house or wait for some time.
1. Is your job secure?
When planning to buy a house, most of us opt for the 80-20 method with us paying 20% as down-payment and Banks paying the rest 80%. We then start repaying this amount through fixed monthly EMIs.
But we can continue repaying the loan only when our job is secure. With the current situation and job market being unpredictable, there is no telling when one can lose their jobs. Hence consider this before you opt for a home loan.
2. Have you defaulted during this lockdown?
This is a valid question that one must answer. Have you defaulted during this moratorium period on any loan EMI or credit card bills? If you have repaid the bill/EMI late or opted for the moratorium, this means you’re not ready to take on such a big loan with minimum reserves.
3. Do you have a contingency fund?
Are you ready to battle any form of emergency like medical/financial? Emergencies arrive at any point in time. In these situations funds are needed. If you have a dedicated fund for emergencies, then good for you. If there’s no special fund, then you will end up using your savings. Post that, how will you be able to repay your home loan EMI?
4. Can you afford 20% of down-payment?
A house in metro cities can cost anywhere between 30 lacs to 2-3 crores. When you opt for a home loan, you will have to pay around 20-30%* of the loan amount as down-payment. So please check if you can afford such a down-payment without affecting your monthly budget, savings, and future payments.
5. Do you have a working spouse/partner?
One of the most practical ways to go ahead with home loans is having a working partner/spouse. This will help you share the EMI burden and you can repay the loan quickly. What’s even better is that you and your spouse can get tax exemptions up to 1.5 lakh each on principal repayment as per Section 80C.
We sincerely hope you answer these 5 questions as post this, you will be clear with your decision of buying a home. If you are looking for the best home loan in India, you can apply on our website as we have the best deals available for you.