One should always have a fixed goal in his mind. The individual should do whatever possible to achieve it. For many people buying a home is a goal they strive to …
One should always have a fixed goal in his mind. The individual should do whatever possible to achieve it. For many people buying a home is a goal they strive to achieve. There are a number of things to keep in mind while applying for a home loan. These steps will help you understand the various factors involved in home loan, so that you can act accordingly.
Here are a few useful tips that will help to simplify the process:
Interest Rates – There are different types of interest rates, you can choose from based of your financial situation. A fixed rate loan requires a predefined amount, to be paid every month. Using the amount of the loan, rate of interest and the term, home loan eligibility calculator India can be used to determine the amount of the monthly instalment. While opting for a flexible rate loan, the amount of interest to be paid varies, taking the prevailing base rate into consideration. In is beneficial when the rates of interest are expected to fall in the near future.
Term of the Loan – The amount to be paid as is inversely proportionate to the tenure of the loan. If the loan stretches over a number of years, the amount to be paid as a monthly instalment will be small, in comparison with a loan that must be paid in a short period. It is best to use a home loan calculator in order to determine if a loan will be easy on the pocket or not.
Maximum Eligibility – It is important that you are aware of the maximum amount you are eligible to receive as a loan. This amount is determined taking your current income and your past financial record into consideration. The current income will help banks decide if you are financially able to make monthly payments. Generally, banks offer 80% of the total value of the house as a loan. 20% is given as the down payment and the remaining amount is paid in instalments. You must have enough of money to make the payments and to live comfortably, at the same time. Banks take all this into consideration while calculating the maximum value of the loan you can receive.
CIBIL Score – In order to receive a good rate of interest, it is extremely important to have a good credit record. Credit Information Bureau India Limited (CIBIL) is a nationally accepted standard of checking and comparing financial history. Credit scores range between 300 and 900. A person with a score of 700 and higher will receive a good rate of interest. This score is calculated based on your net income that you are paying towards existing loans.
Read and Understand the Document – It is extremely important that you read the offer document carefully and understand the finer details. If you are unsure about anything, it is best to ask the bank representative to explain it to you. You must be clear about every detail, before signing the papers.
Keeping these tips in mind, you will be informed about how to go about selecting a home loan that suits your pocket best.