Home loans in India are easiest way to buy the house of your dream. You take a loan, buy a house and pay it pack in EMIs over the period of fixed tenure. You don’t need to save funds all your life to buy a house when you are pretty old. But when you look around to get a home loan, you might get confused with so many options, requirements and things to follow before you apply for one. Thus we have come up with a list of top 10 tips to get the best home loan for you.
Decide the type of property
Before you reach out to take a home loan, know what kind of property you are looking for. Whether you are buying an under construction property, constructed property or want to construct an independent property changes many things for your loan. This includes your amount, tenure and loan amount disbursement details. So decide which property you will be interested to take a home loan for.
Plan your finances
In order to take a home loan, you have to manage your finances for a long time. You have to make apt savings, consider future financial expenditure as home loan down payments and EMIs along with other home loan related expenses. Write down your monthly and yearly budget to make a full proof finance plan so that you can avoid any future crunches.
Start saving for down payment
Banks and NBFCs in India give 85% to 90% finances under home loans for required amount. The rest of the amount is payable by the customer itself. This remaining 10% to 15% amount is can be counted in lakhs. So you have to start panning for your home loan down payment, the minute you decide to take a home loan. If you have accumulated a hefty amount as home loan down payment, banks and NBFCs approve your home loan without hassle.
Use the loan calculator
To understand how much you will be paying off as EMI and in terms of interest rate, use the loan calculator. This will help you to plan your finances better anticipating the amount for your monthly EMI for home loan repayment.
Build up credit score
Credit score is a three digit number summarizing the financial history of an individual. Based on your credit score banks and NBFCs decide whether to approve a home loan for you or not. When you decide to take a home loan, start building your credit score along with savings for down payments. Take a small loan or apply for a credit card and make their repayments regularly to build a strong credit score.
Collect all the documents required
Applying for home loan can be a child’s play only if you know which documents you require to proceed. You need all your KYC details, income history, employment or business details along with the home papers which you are going to buy or build. We suggest you to start gathering these documents one by one as you don’t want to delay the process on the 11th hours.
Know whether you need a co-applicant
Many banks and NBFCs ask their home loan applicants to get a co-applicant. If the loan borrower is not fitting in the income criteria of the lender, he or she can add their spouse/parents/siblings as a co-applicant by linking their income. The co-applicant has to have a steady source of income. You don’t need a co-applicant if you already fit in the income criteria. So know whether you need a co-applicant or not to avoid last minute hassle.
Understand various loan options
There are various types of home loans. Like home loan for under construction property, constructed property, to expand the existing property, to renovate your house, to construct a house or to purchase a commercial property. Understand exactly which type of property you want. Also banks and NBFCs offer fixed interest rate and floating interest rates to its home loan customer. Known the difference between fixed interest rate and floating interest rate and choose wisely.
Know the extra charges
There are some hidden charges when you apply for home loan. Charges like stamp duty, processing fee etc. These charges can be an extra financial burden for you if you haven’t prepared for them. So know, prepare and compare your lender based on the extra hidden home loan charges to get the best home loan.