A housing loan is a long-term financial commitment. There are many who face rejections of home loan applications. Hence, before applying for a home loan, potential borrowers should clearly understand various factors increase the chances of loan application approval. Here are 10 tips that will facilitate a smooth best home loan buying experience.
Top 10 factors to check for a best home loan experience
One can follow these top tips to follow:
1. Get pre-qualified
Potential borrowers can get the home loans pre-qualified. The housing loan process gets much simpler and hassle-free with this. To get started with it, they need to share financial information like savings, income, investment details, etc.
2. Get hold of foreclosure norms
The borrower must know foreclosure norms before applying for housing loan. Learning about prepayment rules is essential to stay clear of any financial hazards later. Moreover, it prevents candidates from paying extra money. In recent past, RBI has put an end to foreclosure penalties.
3. Make sure to keep the documents ready
Compiling the documents before applying for a housing loan can make the process easier and hassle-free. Hence, applicants should keep their financial details like payslips, address proof, id proof tax returns, and bank statements ready to ease the process for the financial institution.
4. Build a good credit score
If the borrowers want to facilitate a good deal on the home loan experience, they should ensure having a good credit score. It summarises the creditworthiness and helps the candidates secure a good deal on the home loan. Besides, having a good credit history can facilitate getting a reduced housing loan interest rate.
5. Start saving for down payment
Financial planning before applying for a housing loan is essential as it helps to save a great deal and make the down payment accordingly. The borrower should take the down payment range of 2.25% to 20% of the house’s purchase price. This helps to reduce the borrowing amount and thereby a lower interest rate.
6. Ensure job stability
One of the eligibility criteria to apply for a home loan is having a stable income source. A salaried individual should maintain a stable source of income with a minimum work experience of three years. As for self-employed candidates, they must furnish documents like ITR of the business and other business-related details. With this, the candidates can establish themselves as responsible borrower.
7. Make use of home loan EMI calculator
Housing loan EMI calculators are beneficial tools to get a clear picture of the EMI amount to be paid, the total interest payable, etc. It enables one to calculate home loan eligibility along with various aspects such as monthly EMI payments, total interest payable, etc., as per the tenor, interest, loan amount, etc.
8. Compare various home loans
It is advisable to compare rates offered by different lenders to make an informed decision. It is essential to understand the lender’s interest rates and fees before choosing a loan offer. The borrowers should compare offers among multiple financial institutions and then pick the suitable one as per their budget.
9. Understand the varied loan types
Depending on the lender, a vast range of housing loan options is available in the market. However, the right choice for a borrower will depend on their financial needs and requirements. Hence, the borrower must check with the lender about various housing loan options.
10. Scrutinise the loan documents carefully
Borrowers should read the term and conditions of each clause and check the documents they need for a home loan before signing the final agreement. In addition, they should clearly understand the entire agreement to have a smooth home loan experience in the entire tenor.
Various reputed lending institutions and NBFCs provide pre-approved offers. These offers are available for financial products like loan against property and others. Individuals can check their pre-approved offers by providing requisite details, such as their names and contact numbers. Such offers enable streamlining the loan application process.