But, before you start the home loan application process, you must consider the following tips to simplify the application and the repayment process.
Research wellIt is easy to get tempted by the various lucrative loan offers provided by the lenders. However, it is paramount that you don’t bit the bait. Make sure that you do extensive research about the different lenders in the market and specifically be careful about three things in your research – down payment, repayment tenure and interest rate. Home purchase loan interest rates vary from bank to bank. Choose a bank that is offering the best interest as it will significantly lower your EMI and save a lot of money in the long run.
Choose the EMI carefullyThe EMIs or equated monthly instalment is the amount that you are obliged to the bank as part of the repayment process. Typically, the banks offer different EMI options to suit the varying needs of the borrowers. The EMI greatly depend on the down-payment amount you pay; the higher the down payment, the lesser will be the EMI. Experts suggest that the EMI you chose must not exceed 45% of your income.
Maintain a good credit scoreHaving a good credit score is a pre-requisite while applying for any loan. Before you start looking for the best home purchase loan scheme, it would be advisable that you review your CIBIL score and if your credit score is less than 750, focus on improving the score first. If your score is 750 or more, you can use the score to your advantage and get a better interest rate on your home loan.
Ask about the prepayment rulesOne of the important factors to consider while choosing the best home loan provider is the foreclosure norms. Typically, the banks charge a prepayment penalty if you try to close the loan before the end of the specified loan tenure. The prepayment charges usually range between 1% to 3% of the outstanding amount at the time of the prepayment. Make sure that you check with the lender about the prepayment norms before signing the loan documents.
Learn more about your Home Loan Eligibility here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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