real estate investment

Things you should know before you opt for a housing loan

Purchasing property is a big decision and a huge investment. Regardless of whether you buy it for investment purposes or as personal/ commercial property, the right way to go about it is to take a home loan that fits your specific requirements, instead of spending a major chunk of your savings on the property. It is not only convenient but also serves as a form of financial security. As one of the renowned property development companies around, we know that many people are unaware of the components of a home loan. And, as a result, they fail to fulfill the accompanying formalities, later on.

So, before you avail of a home loan, it is important to keep the following things in mind in order to choose the best option available and smoothen your loan repayment:

As a reliable residential property developer, we want to emphasize the significance of affordability. It is essential to choose a home loan that you can afford. So, before you avail it, gauge whether you can pay the monthly EMIs without compromising on your overheads and emergency expenses. It should be convenient for you to take the EMI amount out of your income, and still be able to adjust without a sense of discomfort.

Explore all Options
Don’t be in a rush! Before you avail the best option as per your needs, it is important to explore all the home loan solutions available in the market. Your research should be extensive and based on three major factors – down payment, repayment tenure, and EMIs.

Credit Score
Before a bank lends you a home loan, one of the major factors they check is your credit score, which should be over 750. Maintaining a good credit score is not that difficult. All you have to do is make timely credit card payments. It establishes trust between you and the bank, enabling the latter to give you attractive interest rates.

Select Doable EMIs
Banks give you diverse EMI options to choose from. It is up to you, to decide which one seems the most doable to you. Your chosen monthly EMI amount should not go beyond 45% of your net income; so choose an EMI option that suits your specific requirements and does not lead to any stress in the future.

Interest Rate
Understanding what types of interest rates are offered by banks and which one offers the lowest interest rate, is also important while choosing the best home loan option. There are two types of interest rates, i.e. floating and fixed. The former is more beneficial because the interest rate usually decreases with time, so it helps you to save money on monthly EMIs and other expenses. The latter involves a fixed liability, so your monthly EMIs are likely to be higher.

Home Loan Tenure
If possible, it is better to select a shorter home loan tenure. The reason for this is, the shorter the tenure is, the faster it takes you to get rid of the accompanying burden of EMIs, even though that means a higher monthly EMI amount.

Down Payment
When someone avails a home loan, they are supposed to pay at least 10% of the net home loan amount as down payment. The rest of it is paid on a monthly basis. However, the higher your down payment is, the better it is for you, since it allows you to save money on EMIs and interest rates.

Home Loan Documents
Before signing the home loan papers, you should read the home loan documents carefully, including the terms and conditions. Delve into each and every detail mentioned in the documents, so that you fully understand how it is going to work.

Extra Charges
Other than your EMIs, the bank might charge you additional fees, like processing fees, administrative fees, and service fees, while you’re applying for a loan. You should discuss these charges with the bank, just to be on the same page with them.

Foreclosure Norms
Foreclosure of your loan means repaying the rest of the home loan amount before the tenure ends, which is good since it allows you to save on interest. However, the bank might charge a foreclosure penalty, in some cases. So, be aware of the foreclosure norms before you apply for the home loan.

We take immense pride in being among one the considerate property development firms in India. So we request you to take these factors into account, while you are applying for a home loan. Thorough research and consideration of these points will not only help you get the best deal possible, but will also save you from the stress of unexpected financial complications in the future.





















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