Things To Keep In Mind Before Going Ahead With A Home Loan For Your New Flat

Purchasing a home is often seen as a major financial decision by the majority of people. Many people who want to buy a home go for a home loan, but the process to get one is far from straightforward. Prospective homebuyers are unaware of the various formalities involved in obtaining approval for a home loan.

Here are some things to keep in mind when applying for a home loan for flats:

Credit Score

Credit scores play a significant role for banks in deciding whether to grant loans to customers. Maintaining a good credit score is a must for anyone seeking a home loan. It is highly recommended to maintain a CIBIL score of 700 or above to increase your chances of getting a home loan and securing lower interest rates. You can easily maintain a good credit score by never missing a payment on your credit cards and existing loans.

Legality of the Property

Before acquiring a property, verify the builder’s reputation and ensure all necessary documents are available. Thanks to the implementation of RERA in different regions, you can check a builder’s profile online on the RERA website. Loans are often declined by banks when the builder is not part of their approved list.

Payment of Interest on Home Loan 

It is crucial to compare different financial institutions to secure the best deal on a home loan and obtain a lower interest rate. Furthermore, it is equally important to carefully consider whether to opt for a floating or fixed rate.

Tenure for Home Loan

Repaying the mortgage loan can take up to 20 years, involving 240 instalments. Longer tenure makes monthly savings easier by reducing the burden of EMIs. Opting for a shorter period is ideal for saving interest payments since it is calculated over a shorter duration. Banks provide only a portion of the property value as a loan, and the remaining amount is the responsibility of the applicants. Depending on the price of the property and applicant eligibility, this percentage can range from 75% to 90%. The borrower has the option to make either the minimum down payment or choose to pay more. Applicants need to consider both the loan amount and the portion they intend to pay the builder using their savings.

Equated Monthly Instalments

The Equated Monthly Instalments are the monthly payments a borrower makes towards home loan repayment. The monthly instalment amount is based on your preferences. Your EMI amount for your home loan is influenced by the down payment you make. The higher your down payment, the less stress you’ll have from the remaining amount, which will be converted into EMIs. It is important to keep your EMI amount within 45% of your total income.

Down Payment

Before you begin searching for a house, make sure you have a budget in place. Determine the amount of the down payment you would need to make. Typically, it amounts to around 20% of the property’s value. If you have the financial means, you can choose to make an extra payment, which will ultimately save you on interest in the long run.

Do a Research on Loaning Options

Before you apply for a home loan, it is crucial to thoroughly analyse the various options in the market, taking advantage of the vast amount of information available on the internet. When researching loans, consider these four important factors: interest rates, down payment, EMIs, and repayment tenure. If you carefully examine these four factors before submitting your home loan application, you can find a loan with attractive terms and low interest rates from a trustworthy bank. Since home loan amounts are typically larger, it’s crucial to thoroughly research and understand every detail before, during, and after applying for a home loan.

The joy of buying your first home is unmatched. Understanding the intricacies of a home loan can streamline the process and enable informed decision-making. Each step, from determining eligibility to choosing a loan type and understanding the application process to managing EMIs, plays a vital role in achieving your dream home. With the right information and preparation, you can confidently make your dream of owning your first home come true. At Desai Homes, you can find your perfect home and receive help with obtaining a home loan. Desai Homes has partnerships with top banks in Kerala, and all our projects are approved by them. We can help you get a home loan and simplify the process of owning your dream home from Desai Homes. Get in contact with us today to further discuss the matter.