New Delhi: Home loans not only help you realize your dreams of buying that house you have always wanted but also help save tax. But sometimes, the procedure of applying and getting a home loan can be complicated and frustrating. To avoid hassles and save cost, you must choose the right home loan.
Here are 7 tips to choose the right home loan:
- Research well: These days loans are made attractive for the buyers with lower interest rates and additional schemes. Therefore it is better to educate yourself about the terms and conditions of each loan agreement so that you are prepared beforehand. Clarify all your doubts regarding the loan scheme before you finalize anything and don't hesitate to ask questions to the sales person even if you have the smallest difficulty understanding a particular clause.
- Take a look at the EMI: Calculate the EMI (equated monthly instalments) that you will be able to afford beforehand. Remember that you know your money more than anyone else, so keeping in mind your current job and income you can make an approximate calculation about the amount of EMI you can pay. Don't make hasty decisions on this one, because paying penalties due to non-payment of EMI on time can prove to be more troublesome. If you have a temporary job, there are other things to take into consideration so make a wise decision taking care of all the parameters.
- Negotiate on the interest rate: Even though banks and financial institutions swear that interest rates are non-negotiable, they could still make a few adjustments, if you list a few honest issues with the high rates. This can be done only if you have finalized the property you want to buy and you need it as soon as possible. Also, if it is the end of the month, it could prove to be beneficial for you. Sales persons have an aggregate number of sales that they need to complete every month; so in order to complete their target; they are bound to give you certain benefits.
- Loan eligibility: Carry documents which include information like your credit history when you apply for a home loan. You should have paid all your credit card bills and car loans on time in order to move a step higher on the eligibility list while applying for a loan. If you have a clean record in your credit history for payments done on time, then you can use it as an advantage when applying for your home loan. Also, try to focus on the tenure of your loan. If you opt for a long tenure loan then you will be paying more overall as the interest paid would be very high.
- Additional charges to be kept in mind: When you are applying for a home loan, you need to be educated about the various other charges that the lenders add to the current schemes. They will add administrative and service charges or processing fees. These additional fees fall under the amount that is sanctioned in your name and not under the amount that you take home. So before you finalize any deal, you should make note of such additional charges that the lenders put in the scheme.
- Read the fine print of the agreement carefully: Even if the home loan agreement with your bank is a bulky document, make sure you read it thoroughly. Sometimes, lenders may verbally agree to certain points but in the end whatever is present on the paper will only be taken into consideration. So it is best if you could just spend some extra time reading the document carefully rather than getting stuck in complications later on. Never sign on a blank loan paper even if the sales person asks you to do so. Ask questions if you have any doubts, because it is very important to be aware of every term and condition mentioned in the loan.
- Never leave a doubt: Applying for a home loan seems really easy but it comes with its own set of complications. Keeping these few key points in mind would be a good way to start with it. Apart from that, never leave a doubt in your head because it may cause problems later. For your satisfaction clear out everything beforehand and your dream home will be yours in a hassle free manner.
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