Things to Consider While Getting a Home Loan

Finance

Today, getting a home is easier than ever before. There are plenty of lenders out there willing to offer a loan. But, to ensure that you get most of the loan, you must consider the following things.

Owning a home in India is an important milestone. For many, buying their first home signifies their financial independence and it serves as a foundation for their future financial goal. Thankfully, with the easy availability of loans, you can easily afford to buy your dream home. However, to make the most of the home loan, you must plan your finances well. Also, it is advisable to consider a few important things, which are discussed below:

Know the eligibility requirement

The key to getting your home loan approved is to meet the eligibility requirements of the lender. While, the eligibility criteria may differ from lender to lender, most lenders have the following requirements

  • You must be a citizen of India
  • You must be aged between 18-65 years
  • You must be employed and have a regular source of income

Being aware of the lender-specific requirements beforehand will save you a lot of hassles in the future. Also, it will reduce the chances of your loan application getting rejected.

Ask about the documentation

When you apply for a home loan, you must furnish certain documents to the lender; it is an integral part of the home loan application process. The documents could be relating to your income, occupation, business, and of course, the property-related documents.

These documents enable the lender to assess your income profile and the repayment capacity. While the documents required may vary from lender to the other, mostly, the lenders require the following papers

  • Age proof
  • Residence proof
  • Identification proof
  • Income proof
  • Property-related documents

Consider the interest rate

One of the key factors to consider while applying for a home loan is the interest rate, as it has a direct impact on the EMI and the affordability. The higher the home loan rates, the higher the EMI. When you are looking for the best offer, make sure that you compare the loans from different lenders and choose one that offers a loan at a competitive rate. This will help you repay the loan better without any hassles.

Don’t overlook other charges

While it is critical to consider the home loan interest rate before you zero-down on the lender, you must not overlook the other charges involved. You must enquire about the applicable rates, including the processing fees, prepayment charges, home assessment fees, etc.

Typically, most of the lenders that offer home loans at low interest rates tend to have many hidden charges, which increases the overall loan cost. So, while you compare the loan offers, you must pay close attention to the other charges to make an informed decision.

Read the fine print

Before you sign the home loan agreement, it is critical that you carefully read the loan term and conditions. Remember, it is a legal document and once you sign it, you are legally obliged to honour the terms and conditions.

If you don’t understand any technical term, make sure to ask the loan officer about it and get clarification about what it means and its impact on your loan. Be sure that all the terms mentioned in the agreement are in your favour, and if you don’t approve any of the terms, negotiate with the concerned authority and get it rectified.

Final Word

Now that you are aware of the important factors to consider while applying for a home loan, do due diligence to have a pleasant borrowing experience.

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