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Factors To Consider Before Applying For A Home Loan

By Author: Aishwarya Mahurkar
Total Articles: 291

Loans undoubtedly help you to fulfill your dream of owning a home, especially with the help of flexible repayment plans and easy installments schemes. Financing your vision has evidently become simpler if you do your ground work carefully regarding how much you want to borrow and from whom. Several relevant things need to be considered before you apply for home loans, particularly about your budget and your repayment structure.

Monthly net salary


The first step is to calculate your monthly net salary as the income that you earn will pay for the EMIs of your home loan and also will determine the kind of interest rate you will easily pay. Most banks deduct LTA, HRA and medical allowances you get from your annual salary to decide on your eligibility. To calculate your own loan eligibility is important as the bank will consider your past record of repaying loans and credit card dues.


Checking your credit score


Before you apply for a home loan, make sure that your credit report is up to date. You should get a copy of your credit report from credit bureaus like CIBIL; review it carefully as any error in your report can affect your credibility. The bureau gives you points on the basis of your credit bill payments, existing liabilities, EMIs, past record of loan repayments etc.


Interest rate – Floating or Fixed


One of the most important factors to consider before applying for any type of home loans is the type of interest you will be comfortable in repaying. Fixed rate of interest remains the same for the entire tenure of the loan whereas the floating rate of interest is subjected to any fluctuations in the financial market.


Build –up property or Self-constructing


An individual will be needed to provide the lender with details like sales agreement copy, regulatory clearances and occupation certificate on a buildup property. While in the case of self-construction, details of the plot acquisition like the title deed, the sanctioned construction map or plan by the architects and a complete construction cost breakdown have to be submitted along with the application forms.


Processing fees and other charges


The financial organisation providing you a loan will ask you to pay some processing charges like stamp duty, registration fees, valuation fees, mortgage fees, mortgage insurance premium etc. before your home loan is sanctioned. You must compare these charges with other organisations and be careful of any up front charges they are asking you to pay.

Author Bio :

The author is a seasonal writer on topics of finance and the home loan sector. Through her writing, she articulates aspects that are important to people availing facility such as home loan interest rate, documents, home loan eligibility criteria that help to make the best decision.

Total Views: 69Word Count: 454See All articles From Author

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