Mind these factors before you apply for a home loan!
We understand it is the most crucial decision one can take to fulfill their dream of owning their own house, but caution is necessary! It is now more convenient to opt for financial aid as there are many public and private banks in that offer Home Loan products. You can also opt for a loan even if you wished to extend or renovate your existing property. While it could be tricky to choose an ideal loan product offered by many loan lenders could vary in the rate of interest and other norms. An extensive online research could help you find the best housing loan option you can have. But you have to take a wise decision after considering every pros and norm on the loan product and avoid making mistake.
It became a crucial decision as you have to pay for the processing fees in the beginning and the installments for years to come. Although most people mind what options on the rate of interest you are getting on a home loans product. But there are other factors you need to think through before applying for a housing loan. And to make sure you take the right decision, consider following below pointers:
Before you apply:
If your aim is to find the best suitable home loan, you have to scan through many websites of various loan lenders. We are hardwired to follow loan products offered major public banks, but this can limit your options. Some private banks are likely to suitable options as per your requirements. Such financial institutions offer housing funds at affordable interest rates and tenure options to choose from. You can also use an EMI calculator to compare two or more loan products and pick the one which offers affordable installments.
Processing fees:
While you are liable to repay the home loan in EMIs, you also have to pay for processing fees, which isn’t refundable. Most housing loan companies charge 0.5 to 1% of the total loan amount as the processing fee. But keep in mind; lender can still reject the application if your application is invalid even if you paid the processing fees. Some loan lenders can negotiate on such terms hence you can enquire about it.
Choose between the fixed or fluctuating rate of interest:
This decision can save some money on repayment of the loan! The rate of interest on home loan fluctuates as per market conditions. If you choose a fixed rate of interest you will be paying the same amount till the tenure ends. But if you choose floating interest rates, you can stand a chance to pay less on EMIs or shorten tenure.
When applying:
Before you apply for a home loan to a preferred loan lender, avoid making following set mistakes, which most aspirants tend to make:
- The required set of documents varies from salaried person to self-employed person. So make your list accordingly.
- Submit your information right! Whatever documents been asked should be valid and the information you give have to be accurate.
- Avoid overinflated loan amount request. Loan lenders might offer you high-value housing loan, but such loan products also have higher value installments to pay!
- Your bank might offer you a pre-approved loan, but still, quote the loan amount as per your requirements.