India’s home loan market is slated to grow at a CAGR of around 22% between 2021 and 2026. The recent drop in housing loan rates has further accelerated this interest regarding home loans. Also, India’s property prices are such that most families cannot hope to acquire one after paying a lump sum amount.
Due to the easy availability of home loans, fulfilling one of the most significant life goals is now convenient. However, before you apply for a home loan, it is imperative that you consider some important pointers.
Top 4 tips to consider before applying for a home loan
The following are the tips to consider before availing of a home loan:
● Check eligibility criteria and documents required
One of the essential factors to consider before availing of a home loan is to take into account the eligibility criteria of the financial institution. Most lenders have certain requirements which all applicants need to fulfil. Moreover, individuals also have to submit a list of documents before a lending institution approves their loan application.
The eligibility criteria and documentation process vary from one lender to another. Hence, it is imperative that individuals inquire about the details before initiating the application procedure. Furthermore, make sure to consider the factors affecting your housing loan eligibility before you apply for a home loan.
● Provision of additional home loan offers
When apply home loan, individuals must keep an eye out for additional offers provided by different financial institutions. These offers can be extremely beneficial and help you to get access to funds without any hassle. Applicants must take note of all available offers and use it to their advantage.
For instance, some reputed financial institutions extend lucrative pre-approved offers to simplify the loan application procedure. These offers are made available to existing customers on a wide range of financial products, such as home loans and a loan against property. Check your pre-approved offer now by entering your name and contact number.
● The ideal EMI as per annual income
The annual income of applicants is one of the key determinants of their eligibility and the amount of loan that can be sanctioned by a financial institution. In most cases, EMIs on a home loan cannot be more than 40-45% of an individual’s net income. The EMI will be calculated based on the applicant’s expenses, current interest rates and tenor.
Individuals can use a home loan EMI calculator provided by various financial institutions to observe how the computation of monthly instalments is based upon the interest rates and loan tenor. Also, all home loan applicants must be aware of the benefits of calculating EMIs before taking a home loan.
● Try to make a substantial downpayment
The amount of down payment made has a direct impact on home loan interest rate. The higher the amount, the lower will be the interest rate. Moreover, the monthly EMIs will also decrease along with the overall interest payable because of the limited loan principal, in such cases.
Hence, making a substantial down payment will reduce your monthly EMI burden when you apply for a home loan.
Nevertheless, in addition to these tips, applicants must also inquire about the additional charges that might be involved. Moreover, it is imperative for individuals to make sure to acquire a property that is affordable as per their financial capacity. Hence, before initiating the home loan online apply procedure, all applicants must evaluate their current expenses and long-term obligations.