Want To Take A Home Loan? Remember These 5 Steps

Deciding to purchase a property is a huge decision you are expected to make. It is an exciting one as well since you will finally have a roof over your head that you can call your own. However, applying for a home loan is daunting but is an ideal solution to fulfil your desires. Banks have tight and stringent policies in place when it comes home loans. If you get the tricks right, there is no way for your application to get rejected.

If you are running around from one pillar to the other, trying to understand the exact procedure to get a house loan, do not fret. The following steps will bring you closer to your dream home:

• Assessment: You need to conduct self-assessment. Check your assets, liabilities, financial responsibilities, and existing credit lines will lead you to a figure that truly reflects your financial profile. Do not overleverage yourself. Remember, your equated monthly instalments (EMIs) should not exceed 40 per cent of your takeaway salary. Ending with an empty wallet at the start of the month, only to buy a property makes no sense. Do not go ahead with a loan unless you are sure about your affordability.

• Thorough research: Every lender today advertises how easy it is to avail of a home loan from them. It is challenging not to get influenced. However, do not get carried away only from the advertising perspective. You need to carry out proper comparison of lenders since you can apply for loans online as well today. Comb through the websites and make the best use of the online tools by understanding the features and interest rates they offer. You must also consider the experiences the previous customers have had with them before you decide on the best option.

• CIBIL score: One of the steps not to ignore is CIBIL score. The credit ratings are crucial as it decides your creditworthiness. The score required by banks is usually 700 to 900. If the score is lesser than the said range, the loan gets rejected. Try getting the credit report from the CIBIL website three to six months prior to housing loan application. There could be typo errors or existing debts which will hinder your application. Make sure you have blemish-free report presented to the lender before getting the credit.

• Documentation: The home loan in India emphasises on documents. The lenders scrutinise your property papers before sanctioning the loan. Documentation glitch can cause real threat to the loan application. Loan aggregators, banks, or various other internet articles mention the lists of documents which you need to upload or carry along for the credit. Read through them carefully and prepare for them accordingly. This way, you do not miss out on anything, and you receive the loan smoothly.

• Negotiation: Although CIBIL score and documentation are essential, you have not found the ideal house loan deal unless you have found the best rates on the same. Hence, before agreeing to the terms and conditions of the lender, make sure you are aware of the different loan components such as prepayment charges, and other penalty fees. There is no problem in asking questions at the time of signing the main deal. In fact, if you hold a score of 850, you can always negotiate for better rates. You could sweeten the deal further by getting waiver on processing fees and so forth.

Home loans are not only life-altering decisions; you also make a long-term commitment and establish a relationship with the lenders. Make wise decisions and reap the benefits of during the entire tenure of the credit. Make comparisons through portals or check for offers on your mobile banking apps.

Shashank Bhaskar is an Mba student and financial advisor in Mumbai.he shares his financial experience and guides you about all your financial queries.