Buying a home is a special moment in everyone’s life. Since there has been an enormous price-hike in the real estate sector, you might have to look for financing options to purchase your dream house. A home loan is a great form of financial aid that can help you buy your desired property. The popularity of home loans has increased massively in recent years. Leading banks and NBFCs provide home loans with features such as flexible repayment option and low-interest rates. It is also possible to customize your home loan according to your needs and requirements. Before availing a home loan, you must take certain aspects into consideration. Below are a few things that you must make a note of while availing a home loan.
Aim at Affordability
While you get a lot of home loan options to choose from, affordability is a major contributing factor that you need to consider before applying. You should be able to afford the fixed monthly EMIs and adjust them comfortably within your cost of living. It is equally essential that you maintain a steady income outflow in order to meet any unforeseen emergency. So, while you can always choose to purchase your desired house, in your preferred location, being able to afford the home loan is equally significant.
Improve your credit score
Financial institutions check your credit score before approving your home loan. A good credit history can help you avail a high loan amount at a reduced interest rate. The higher the loan amount, the lesser down payment you’ll have to make while purchasing your dream house. On the other hand, poor credit history can hamper the chances of your loan approval.
Once you have a home loan to repay, it is recommended to follow a strict budget to meet your equated monthly installments (EMIs). Make sure that you pay your EMIs regularly in order to maintain credibility andavoid increased interest rate.
Choose Suitable EMIs
Financial institutions offer varied EMI options to cater to the needs of the borrowers. Your EMI also depends on the down payment you make at the time of purchasing the house. Make sure that your EMI amount does not exceed 45% of your total income. While availing a home loan, you can get an estimate of your EMI through online EMI calculator.
Apart from the EMIs, financial institutions may also levy additional charges such as processing fee, service charges, etc. on your home loan. Ensure that you discuss these with the lender prior to the loan application.
Before you settle for a home loan, make sure you compare various deals offered by different financial institutions. This will allow you to avail a home loan that best suits your needs. Lastly, do not forget to read the terms and conditions of your loan agreement before signing it. This will help you avoid any inconvenience in the later stages.