These are designed specifically so as not to let the opportunity for these dreams to be realized without having to pay all the money. However, getting a home loan may seem a complicated process. There are many factors associated with a home loan that you need to know before you get a loan. Most prominent are listed below:
1. Factors That May Affect Eligibility Criteria: The best way to calculate the right to home loan is to calculate the EMI. In general, banks limit the amount to 40 and 50% of the borrower's income – including the basic salary and the compensation of love. It also considers the credit history of a borrower. So if you have any existing loans or a poor credit score, the loan amount will be further reduced or you may have to pay an increased interest rate on home loan. People with a stable income, strong repayment skills and good credit scores find it relatively easier to get a loan compared to those with disordered income and poor credit history. Also, having a co-applicant allows you to get a home loan with ease.
2. Understand your Loan Type: Banks provide home loans in two types of interest: fixed interest loans and floating interest loans. Fixed Interest Loan is a type of home loan where interest rates remain the same and the borrower has to pay a fixed EMI all the time the loan is borrowed. Rather, in the case of a variable interest rate, it differs according to market conditions that lead to fluctuations in the amount of EMI more often. That is why fixed-rate home loans have the highest interest rate of 1 to 2.5 percent of floating interest rates.
3. Interest rate: Whatever type of home loan you choose, do not forget to negotiate with the rate. Although banks will always have an advantage, you will have to face this, especially if you have been a loyal customer of the bank and have a savings account in the same bank. Negotiation would be much easier if you have a clear credit history. In addition, you can also benefit if you apply for a loan at the end of the month. Since banks have business objectives, they can be more flexible at this time if they want business.
4. Slim Printing: A home loan agreement is a legal document that has all the details of the loan. If you think you will not pay EMI in time it will only lead to problems, you are wrong! There are many hidden clauses in the printing house. It is therefore advisable to read carefully the final letters of the loan agreement before the dotted line signature. Be cautious about the credit processing fee, penalty payments, hidden clauses, service fees, and prepaid penalties, etc. Any negligence in this context would lead to greater problems in the future.
5. The longer loan term means lower-cost loans: As a general rule, the longer the loan, the more interest you are likely to pay for a period of time. Many people can withstand this growth, but not everyone can do it. It is therefore wise to apply for a loan amount that you can easily return to a short term. In this way you may have to pay large EMIs, but for a shorter duration and no more interest rates support.
These are quite a few things you should keep in mind when applying for a home loan. Note that getting a loan from a bank does not mean you are stuck there until your credit is fully paid. You always have the option of switching. You only have to pay the processing fee in this transition process and also the pre-payment penalty (if you are charged by your current bank).
Source by Sumit Kumar