The decision to take a home loan to buy a house is very important. since the emi as a home loan has to be repaid for a long time, it has to be decided very thoughtfully in its choice. let’s see what first-time home loan borrowers should take care of so that they can feel comfortable while repaying the emi for a long time.
1. Good credit score, cheap loans
The customer’s credit score is very important for home loan financing financial institutions, including banks. great credit score gives you more and cheaper loans. a credit score above 800 basis points is considered to be the best. credit score can be improved by paying your existing emi and credit card bills on time.
once you know your credit score, you should keep identity proof, address proof, income tax return related documents, bank statements, employer proof and other documents ready. if you have decided to buy a house, then collect seller identity and address proof, title of property, map, completion certificate so that it is easy to take a loan.
2. There is a benefit in taking a joint home loan
If you are taking a home loan in partnership with someone, then you have an advantage. in such a situation, the bank considers giving loans by adding the income of the co-applicants. the eligibility to get a loan from the shared application also increases.
joint home loan gives co-applicants the benefit of tax deduction. if there are female applicants, some banks reduce the interest rate of home loans by half a percent. the burden of paying emi on taking a joint home is also divided.
3. Look for a low interest rate
Before taking a home loan, find out which bank is giving the loan at what rate. the rates of different banks vary and vary from 10 to 20 basis points . even such a difference in long-term loans can save you a lot of money. if an applicant is buying a newly constructed house and takes a loan from a pre-approved bank, it is processed quickly. because banks already have a lot of information about this property. in such a property, your bank can give loans at a lower interest than other banks.
4. Read all documents carefully
However, reading the bank documents related to home loans is a tricky task as it is very heavy and full of technical terms. yet try to understand it as much as possible by reading it as far as possible. for this, you can take the help of financial content or loan-related information sites. try to read carefully what is written in small letters in documents. it is important to read and understand the terms and conditions associated with paying emi properly.
5. Maximum down payment, minimum loan term
Usually, banks demand 20 per cent downpayment while giving loans. in many banks, this is also necessary. however, the ideal situation is that if the home loan customer downpays 50 to 60 per cent of the price of the house, then the emi burden is significantly reduced. the more you make a down payment, the lower the interest burden on you.
Many banks keep the loan repayment period up to 30 years. however, the customer should not take a loan of more than 20 years. the longer the loan repayment period, the more your financial burden will increase. at the same time, there is also a risk of volatility in interest rates.