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Finance your dream home with housing loan


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Owning a home is one of the biggest dreams in every individual’s life. However, due to the zooming property prices and prior financial commitments, it has been difficult to fund home on your own. If you approach traditional lenders, you’ll be duped with exorbitant interest rates which can seriously derail your finances. The best way to arrange money is to take a home loan. Today, almost leading private finance companies and banks provide home loans in India to potential borrowers. They provide a loan with attractive interest rates starting from 8.5% and flexible loan tenure of around 20-25 years to rope in the new customers. You can evenly spread your EMIs so that it won’t put a strain on your finances. However, the competition is quite stiff and it becomes quite a daunting task to apply for a loan if you don’t have enough knowledge on the subject. It would turn to be bumpy ride experience while applying for a home loan. So, avoid these bumps and pitfalls by following few tips given below:

Understand your interest rates:

Interest rates are the crux for any form of a loan. Thanks to the initiative taken by top banks and finance companies, you can borrow loan with attractive interest rates starting at 8.5% p. a There is fixed, floating and semi-fixed floating types of home loan interest rates. As per your risk potential and income source you can opt for a suitable one. Fixed rates are slightly higher than floating rates because the lenders are bearing a risk of market volatility. And semi-fixed floating is a new type of interest rates designed to protect the borrower from initial market fluctuations and later they can gamble with floating rates.

Be Prepared with your down payment:

When you approach lenders, they will sanction 80-85% of your property value. The remaining amount has to be paid by the borrower to the builders. Thus, it’s important you save enough to pay towards the margin money before you plan to apply for home loans in India. The more down payment you make to the bank or finance company, lower would be your interest rates. Thus, you will get affordable home loan EMIs, and it will be easy for you to clear off the debt in the long run.

Maintain a healthy credit score:

Don’t take your credit score for granted, because it would be the first thing lenders would evaluate along with your income source. It depicts your creditworthiness and repayment history. They will check each and every default, prior loan settlement, your financial history, etc. Once the lenders are convinced, based on your credit score and documents submitted, the lenders will ascertain your repayment capability. If there are more default, they might give higher interest rates or else reject your application as well. An ideal score of 750+ will put you in a strong position to negotiate with the loan providers for lower home loan interest rates and higher limits.

Your Property Documents:

When you make a loan application, you need to submit your property related documents. It’s important you speak to the builder, and collect all the documents for quick and easy loan processing. Some documents are as follows: Property development plan, NOC, Mother deed of land on which property stands out, an agreement between the developer and you. For a resale property, you would require a copy of seller’s property registration certificate, power of attorney, municipal body letters, etc.

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