Key Essential You Need to Know Before Applying for a Housing Loan

Those who are always on a house hunt will surely agree on the fact that why knowing about the rates is important? After all, rates play an integral role in the overall journey of the individual. Yes, they can even make or break the situation for you. This is the reason why people are always so curious about them. But before we talk about the rates, let’s just talk more about a housing loan and how rates impact the same?

What is a Housing Loan?

It is a type of secured loan that can be taken to buy a dream home. There are many top banks and NBFCs available in the marketplace that offer you this credit facility as per your repayment capacity.

However, one thing that needs to be mentioned here is the fact that the only money you need to arrange as the down payment, which can be as low as 10% as most of the lenders give loan amount up to 90% of the property value.

And, as far as rates are concerned, they usually vary from lender to lender and this credit facility can be taken for a tenure of up to 30 years. Take a look at the benefits to apply for home loan below:

• Cheapest loan starting at 8.45% per annum

• Women borrowers /co-applicants get special rates

• Compare different EMIs and then decide

• Avail the benefits of home loan balance transfer and get lower rates

• Enjoy tax exemption on your existing loan

Eligibility Criteria

Before availing the credit, it’s the home loan eligibility that matters a lot. There are different norms set by the bank to decide whether you can get the loan or not. And,they judge both salaried as well as self-employed applicants on parameters like age, income, credit score, CIBIL score and current experience.

Types of Housing Loan

Before you apply for the same, take a look at the article below to know more about the types of the loan.

• Home Purchase

• Land Purchase/Plot Purchase

• Home Construction

• Home Improvement

• Home Conversion

• Home Extension

Factors Affecting Your Housing Loan

Monthly Income: If an applicant is earning a good monthly income, there are higher chances he/she can get the best deal. The higher the income, the easier it is for an applicant to repay the loan as fewer chances are there for loan default.

Credit History: Your three digit numeric history is also a gateway that helps you in enjoying a hassle-free journey. Lenders do check the score of the applicant before offering the credit. If we talk more about the same, it is nothing but a combination of credit score and repayment history that shows the creditworthiness of an applicant.

Interest Rates: Before going for this credit facility, it is important that you should check out the housing loan interest rate. Different lenders offer different rates to the applicants based on their eligibility. And, if the rates are lower, you would be able to enjoy a smooth journey which can actually reduce your repayment burden.

Kavya Jain, is a financial writer who has written on various financial products.She believes in delivering best of her knowledge so as to help the readers understand the product and be aware of their financial decisions.