15 February, 2018 Home Loans
The world is full of uncertainties but your home loan should not be. Borrowing a home loan is a long-term commitment and one of the largest investments an individual makes in a lifetime.
Getting home loans involves a lot of paperwork and documentation and sometimes it can be time-consuming and exhausting while applying for a home loan. But before you decide on borrowing a home loan do keep these important things in mind before applying for a home loan in India.
With the advancement of technologies it has become more feasible for a home buyer to analyse and Research all the aspects related to borrowing a home loan, it has now become mandatory for a home buyer to do a little research and know the positives and negatives of borrowing a home loan, Your hard earned money is on the verge, through which you can live a peaceful life or worrisome life. There are many stories floating on the internet where we can see many people cry after borrowing a home loan as they did not do their homework before taking a loan. There are multitude of websites which provide detailed information on the various products through which you get the knowledge and know the interest rate of other banks which is suitable for you.
LOAN ELIGIBILITY AND CIBIL SCORE
Home loan eligibility depends on the credit worthiness of the individual before applying for the home loan. An individual is requested to provide CIBIL score where the lender can analyze your power to repay the loan. CIBIL provides a Credit score on a scale of 300 to 900 based on your history of paying debts, if you have a good record in paying your debts then you can use it as a plus point when applying for a home loan. The more preferred CIBIL score is 750 or more which will help you to get a lesser rate of interest on home loan.
READ DOCUMENTS CAREFULLY
It is always advised by our elders that before signing an important document we should read it thoroughly to minimize the future risk. We should read all the documents pertaining to the loan document with a keen eye as there are chances that the point which you negotiated with the agent thinking that it will reduce the burden on your wallet may not be in the agreement.
For the first time home loan buyer it is a little bit confusing as which interest rate type they should adopt. Whether they should opt for a fixed rate of interest or floating rate of interest, in the case of fixed rate, the interest rate will be fixed till the end of your tenure on the contrary the floating rate of interest keeps changing as per the RBI rules and terms. Fixed rate of interest is beneficial when the interest rates are expected to rise in the near future where is floating rate is beneficial when interest rates are expected to fall in near future.
Easy monthly installments are that installment money which you will pay from your salary and sometimes the buyer overlooks their wallet capacity and fix the higher EMI thinking it would benefit them in near future. It is advisable not to overstress yourself by thinking your future earnings will rise and set the EMI at a much higher level. There is a golden rule which says never let your EMI exceed 40 to 45% of your net monthly income, if you earn more in near future there is an option of PREPAYMENT of your home loan which you can opt.
Be well versed about the tax benefits you are going to receive while paying your home loan as you are going to get complete exemption of home loan in India up to an amount of rupees 150000 and 1 lakh on the principal amount. But if you plan to sell the property in 5 years of purchase then the total exempt tax will be deducted from the sale amount.