So you have zeroed on your dream home or first property investment.But have you figured out how to go about looking for the right home loan?The decision is big, exciting and yet nerve wracking! This article is going to take you through some pointers that would make your home loan journey easier.
1. Research the loan market on its various players and their products. Undertake a comparative analysis on terms, rate of interest, charges and other conditions before finalising on the bank/Housing financial institution (HFI) and the scheme.
2. Maintain a good credit history so as to improve your eligibility chances and to obtain lower interest rates.
3. Check approval status of your property with the bank/HFI.
4. Figure out your down payment as the bank/HFI will provide the loan to cover only up to 75-80% of the total cost of the house/property.
5. Evaluate your income, assets & liabilities and accordingly determine the EMI you could afford without over burdening your financials.Strike the right balance between loan amount, loan tenure and EMI.
6. Organise documents and keep them ready before applying for the home loan to facilitate speedy sanction.
7. Be aware of additional and hidden costs such as service charges or processing fees. These amounts would be deducted from the sanctioned loan amount.
8. Be aware of any pre-payment charges. Some Housing financial institutions/banks charge substantial prepayment penalty.
9. Read the fine print regarding the loan terms and conditions very carefully and clarify any doubts with the bank or financial institution before signing the final loan agreement.
10. Obtain acknowledgement for List of Original Documents submitted with the bank/HFI.