When to get a home loan?

When investing in a property,  your financial status is critical in deciding when to invest in a property. Apart from the cost of the property, there are other costs such as stamp duty and registration charges. Your finances will also determine other factors like the location of the property, its configuration, amenities, and developer. While thinking of investing in real estate makes sense, availing of a home loan to maintain your overall financial health makes sense.

In purchasing any property, diversification of funds is notable. After all, you cannot take the risk of investing all your savings in one asset class.

When you should apply for a home loan the timings absolutely matter as they can impact your overall financial growth. With banks, Housing Finance Companies, and non-banking finance companies to obtain a home loan is not a difficult task. You can easily avail yourself of them. You simply have to decide when to apply for a home loan.

Mention below is instances when you can apply for a home loan so that you get the desired financial help at the right time and can go ahead with your property investment.

1. When you have enough savings to make a down payment:- If you have enough savings to make the required down payment then it is the right time to apply for a home loan. When you apply for a home loan, the maximum loan-to-value ratio of the property is 90%. The amount sanctioned will depend on various factors such as your salary, eligibility, and credit score. Once you have collected your wealth right away apply for a home loan. It is a big financial mistake to take a personal loan to make a down payment, as this will only increase your debt.
2. When you have long work experience with a good pay package:- If the number of years of your service and monthly salary is on the higher side then this can be advantageous because you will be eligible for a higher home loan value. In addition, you can service your EMI on time. Always remember the EMI you pay should never be more than 40% of your monthly income. Anything more than that can lead to financial disaster.
3. When you have no other existing loans/credit card repayment:- When you have no other existing loans to service that is when you should apply for a home loan. Already existing loans for unemployed loans in the forms of personal loans, auto loans, education loans, or credit card repayments, there will be an increased responsibility on you towards paying the home loan. With multiple loans at the same time, the financial institution would question your financial status and end up giving a smaller amount at a higher internet rate.
4. When interest rates are low:- Investments are extremely tempting these days, owing to the low-interest rates offered by banks, HFCs, and NBFCs. It reduces your EMI to some extent, thereby, reducing a great deal of your financial burden. While applying for a home loan you can choose either a fixed rate of interest or a floating rate of interest.
5. When the due diligence is done:- It is always financially profitable to apply for a home loan when the due diligence is done while investing in any property. So, in case there is any issue with the property that you may have missed or were not notified about, the financial institution may turn down the home loan. Thus, it acts as a safety net for your investment.

To conclude, choosing when you should apply for a home loan is highly essential because the home loan tenure is around 20-30 years and that amounts to a significant period of your lifetime. Also, you can apply for a home loan without a job. Although it is a critical requirement that every lender considered, there are many lenders who provide loans for the unemployed.