8 Points To Consider Before Taking A Home Loan
Finding a reliable loan partner while buying flats for sale in Hyderabad is a daunting task. With paperwork, hidden costs, and a bunch of regulations, we understand the loan hassles like none other. Here we have summarized eight factors to keep in mind before applying for a home loan.
Each bank has different eligibility criteria before qualifying you for a home loan. Some of the factors that govern the eligibility criteria are age, qualification, financial standing, dependents, credit score, ability to repay etc. You can also check your eligibility criteria online from various third-party websites.
Loan approval first
Make sure you get your loan approved from the bank before you select from the flats for sale in Hyderabad. This will help you filter out the property choices by narrowing down your choices. In addition, pre-approval often helps to grab a good deal for purchasing a home.
Check the loan amount
The lender will release the loan amount based on the value of your chosen property. Generally, it ranges from 75 to 90% of the cost of the property. If you have a co-applicant, the bank will consider his/her income and increase the loan amount.
Check your credit score
All lenders look for a high credit score to make sure that you can repay the home loan. A credit score above 750 is desirable by the majority of banks. It also checks whether you are repaying other loans on time.
Calculate your EMI
An equated Monthly Instalment is the monthly amount the borrower pays to the lender every month. The EMI includes the principal amount as well as the interest amount on the principal. In addition, lenders offer home loans with various repayment tenures. Undoubtedly, a longer tenure will be easier on your pockets as you will have to pay a lower EMI as compared to a shorter one.
Lenders offer loans on two types of interest rates, namely floating interest rate and fixed interest rate. When the interest rate of a loan doesn’t change throughout the tenor of the loan, it is said to be a fixed-interest home loan. On the other hand, in floating interest, the interest rate changes with market conditions. The interest on your home loan is governed by a benchmark rate such as the repo rate. Hence, whenever the repo rate changes, the loan interest rate also changes.
Keep required documents ready
Carry out a thorough check of the relevant documents before applying for a home loan. A few of the important documents are salary particulars, ITRs, bank statements, property documents, tax-paid receipts, valuation reports, identity documents including proof of address, current loans and credit reports.
Keep in mind the additional charges
While buying flats for sale in Hyderabad, don’t forget to add additional costs like interest payments, administrative charges, processing fees, prepayment penalties, etc. To mention, your home loan should ideally have zero prepayment charges if you are availing of an adjustable/floating loan.
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17 Nov 2023 | 130 Views