A home provides a roof over your head and doubles up as an investment. You can sell your property for money in the future. A Home Loan is the best way to finance your dream house. It safeguards your savings and provides the flexibility to repay your property cost comfortably through equated monthly instalments.
There are many Housing Loan options available in India. Choosing one among all of these can be confusing. To help you get the best option, here are a few tips that can prove helpful:
- Check your CIBIL scores
Home Loans typically include high amounts and long tenures. Thus, only individuals with a good credit history can apply for them. The minimum credit score required by most of the banks in India ranges between 650 to 750. Moreover, your CIBIL score is directly proportional to the Loan amount you are eligible to borrow. Check your score every six months to track your creditworthiness and devise a strategy to improve it.
- Start saving for a downpayments
Banks usually need you to pay 10% to 30% of the total purchase value of your house or property as a down payment, depending on the Loan amount. With increasing expenses, it may become difficult to save for it. However, by making small changes in your monthly budget, you can ensure that some of your income is set aside in a Savings Account to build a corpus for the down payment.
- Arrange your financial documents
When you apply for a Home Loan, you need to provide certain documents to the bank, such as your recent salary slips, Bank Account statements, and ITRs, among other paperwork. Arrange for them beforehand to avoid rushing at the 11th hour to find what you need. The documents vary between banks and salaried and self-employed professionals.
- Use an EMI calculator
Understanding your EMI payments is the most important Home Loan repayment tip. Computing your monthly EMI payments before applying for the Home Loan can prevent you from taking on debt you cannot afford to repay. EMIs depend on the Housing Loan interest rates and tenure set by the bank, among other factors. You need an online EMI calculator to determine how much you can borrow and repay.
- Compare the offers
The cost of procuring a Housing Loan may vary between banks. Before starting the application process, you should consider the interest rates, processing fees, application fees, technical valuation fees, and other miscellaneous charges. To get the best offer in 2024, compare different schemes banks offer and other ancillary costs associated with borrowing.
Conclusion
A Home Loan is a debt you take out for a long term, generally between 20 and 30 years. So, you should pick the best scheme that fulfils your financial needs for peace of mind and gives your family a secure place to spend their present and future.
