5 Things to Consider Before You Apply For A Home Loan
Buying a home is one of the most significant investment decisions you’ll ever embark on. You might have heard of how people saved money throughout their lives to buy their dream home finally. However, with India’s soaring high exorbitant prices, it is definitely advised to seek housing finance assistance before starting the home buying process. This will help you buy your dream home and not wait before you save for the entire cost of the house.
This way, with a home loan, you can fulfill your dream of buying a house without compromising on your living standards.
So, if you have a keen eye on any suitable home of your choice, keep the five crucial things in your mind before applying for a home loan.
#1: Do not submit multiple applications with multiple banks simultaneously
When applying for housing finance, several individuals make the mistake of sending applications to multiple banks simultaneously without taking note of how it will hit their credit scores. The thing is, when you submit a home loan application, then the bank checks your CIBIL score to ascertain your creditworthiness. If you send out frequent queries, that will surely harm your credit score.
Therefore, as a home loan applicant, you cannot afford to get your application rejected. So, prevent a dip in your credit score and refrain from submitting multiple applications to different banks within a period.
#2: Check out for loan processing and other charges
The interest rates on a home loan are the first thing you need to look for when considering a home loan. Top financial lenders like Agrim Home Loan explain to you everything about processing fees, foreclosure charges, and late payment penalties. In some cases, you might identify other costs associated with the GST and document charges. Also, some insurers might want to sell you cross-sell other insurance policies along with the loan. So, refrain from that too.
Also, try negotiating the total charges at the outset of your financial lender before accepting a home loan from them.
#3: Compare home loans from various lenders
Comparing home loan offers from different lenders might seem like an overwhelming task, but a critical one. Your lender offering a low-interest rate might ask for a high processing fee and other associated charges. It is why you need to dig deeper and explore the most suitable home loan. So, always compare interest rates and corresponding EMIs.
#4: Read more fine print
Have you ever encountered situations wherein you faced financial losses just because you didn’t read the terms and conditions of the document and signed it in the blind? Although most reliable home loan providers, including banks and other NBFCs, follow a transparent process to sanction loan amounts, reading the document before signing it is always good. If it looks fishy or unclear to you, ask them to clarify things for you.
#5: Down payment
The usual down payment is between 10-15% of the total loan amount disbursed—the rest of the amount you can pay in EMIs. If you feel you have enough money with you, increase the down payment amount to avoid paying hefty EMIs every month.
