My dream house! Haven’t we heard a lot of people saying this? Do most of them really make their dream come true? No, not everyone! But seeking the right home loan plan is indeed a vital place to start with. This can be done by analyzing some points and then coming to a conclusion. Here are some things you really need to keep in mind while choosing one:
Check eligibility and loan amount: Your eligibility criteria encompasses your age, job and salary status, job stability and credit history. Moreover, the amount that you can get as loan depends upon your property or monthly salary. You can get 85-90% amount of the property value for loans less than or equal to Rs 30 lakh.
Interest Rates: Obviously, you’ll look for a home loan with lower interest rate but, you should also consider whether interest rates are fixed or floating. Fixed interest rates will allow you to pay constant EMI but with a floating one, EMI changes according to market rates. Floating rates are better if market rates are declining so you have to pay less in a shorter span of time. If you are getting a lower interest rate, it’s much better to take a fixed interest rate plan. Plus, having an understanding of loan policy is always a positive.
Want to pay some more? Banks charge prepayment and processing charges for initializing the loan procedure. It’s better to choose banks that seek low prepayments and processing fees. It ranges from 0.2% to 2.5% of the loan value and is different for different banks.
Turnaround Time: Time taken by the bank to sanction the loan should be entertained. Moreover, it must be taken into account whether the bank has a policy of providing certificates time to time depicting loan status. This is an important factor to judge any bank on.
Documentation: All banks demand the same documents for processing a home loan, however, there might be some differences with different banks. You should prepare all your documents prior to applying so as to avoid delay.
Your capacity to pay: Last, but not the least factor, is your capacity to pay an EMI. You should only choose an amount that you can pay. Amount of time and amount of EMI to be paid, both should be considered side by side.
Emptying your pocket? Sometimes, people may be tempted by other factors to choose a plan with a higher EMI. Spending and earning should both be in harmony to keep you in good health. You have to repay your EMIs for a longer span of time and surely, you want to pick a loan amount that you can repay easily without much stress. After all, you are buying happiness not a hassle to your life!
Home is a concrete investment that people at some point of time really want to capitalize. Not only you decide to choose a home loan plan but you also roster your spending power until the loan amount is reimbursed.