All you need to know about home loans for Flats
Buying a house is one of the most significant financial decisions you will ever make. For first-time homebuyers, especially in the service sector, investing in flats seems to be the right choice. However, apart from choosing a trendy décor and design, you need to stick to certain basics when building your dream home. We’re talking about funds. Nowadays, with loans for flats, you can bring your aspirations of owning a house alive.
However, if you’re planning to take a home loan, you must understand the entire process because it is a commitment that will live beside you for a couple of years until you repay the entire loan.
Here are a few details you must know before applying for home loans for flats.
The eligibility criteria:
The first step you must take is to ensure that you are eligible to apply for a home loan. At the start, all financial lenders will assess your eligibility for the home loan based on your income, credit score and repayment capacity. In layman’s terms, they will check if, after being granted the loan will you be able to pay it or not. Other important considerations include – age, qualification, financial position, number of dependents, spouse’s income, and job stability.
Check out the different types of home loans available:
The next step is to check out the varied loans for flats that you can apply for. These include:
- Adjustable/floating rate loans: In this loan, the interest rate corresponds to a lender’s benchmark rate. If the benchmark rate changes, the interest rate also changes.
- Fixed-rate loan: In this loan, the interest rate is fixed when you take out the loan and is applicable throughout its tenure.
- Combination loans: These loans combine adjustable-rate loans and fixed-rate loans. It means that a part of the interest rate is fixed, and a part of the interest rate is floating/adjustable.
Should I buy a home first or take out a loan first?
Experts at Agrim Housing Finance say that you should get your loan pre-approved before selecting your home. Pre-approval helps you fix your budget so that you now focus on searching flats in that price range. Moreover, pre-approved loans are easy to negotiate and close faster. You can even check with the lender if any suitable properties are available in the preferred location.
The loan amount:
As defined, lenders can provide a housing loan ranging from 75-90% of the cost of the property, depending on the loan amount. For example, if the property is valued at Rs. 50 lakh, then you can avail a maximum loan of Rs. 40 lakh depending on your eligibility for the same. In case you include any co-applicant along with you, then you can increase this amount. However, this co-applicant must be either your adult child, spouse, or parent, but the payment for the loan will be expected from you.
EMI/Pre-EMI:
EMI or equated monthly installments is the amount you will have to pay the lender each month. It includes the principal amount and the interest payment on the outstanding loan value. Pre-EMI is used when buying flats under construction so that the loan is disbursed in stages on the installment amount you need to pay the developer. home loans for Flats
