House loans are financial assistance availed by many to purchase residential properties. It is a fact that the rising real estate prices often deprive prospective homebuyers of being able to go ahead with a purchase. But, with reputed financial institutions offering housing loans, making the purchase now is easier. You can avail up to 90% of the total property cost with a house loan provided you meet the eligibility criteria of the lender of your choice.
When you are considering a housing loan for your fund requirements, you need to be well-aware of the ins and outs. Once you know all such details, you will be able to make better financial decisions, which is vital considering that a house loan is a long-term financial commitment. The points which you must consider while applying for a house loan are
Maintaining and checking your Credit Score
Your application for a house loan or any other loan will be approved by a financial company only when the authorities are convinced of your creditworthiness. To do so, the authorities check your CIBIL score. It is thus important to maintain a healthy credit score, especially if you are thinking of availing a house loan in the near future.
Organize and consolidate other debts
House loans come with significant EMIs and lenders will duly consider the FOIR of an applicant. If he/she has a substantial amount of existing debts, there is a high chance that he/she has a FOIR above 50%, considered as negative by lenders. This is one of the major factors that affect your house loan eligibility.
In such cases, the individual must consider clearing off some existing debts through savings or consolidating them under the upcoming house loan.
The amount of loan burden a borrower will have to bear depends majorly on the loan tenor, along with the interest rates. Opting for a longer tenor might reduce the house loan EMI, but it will increase the overall interest payable. A borrower can look for ways to reduce house loan tenor along with the EMIs such as opting for a shorter tenor or making a part prepayment.
Checking eligibility criteria
The house loan eligibility criteria set by lenders are likely to be different from one another. While you might qualify under the eligibility criteria set by a particular lender, you might not be eligible under those set by the lender you want to borrow from. Thus, you must check such criteria before applying for a housing loan.
Comparing loans offered by different lenders
In the present scenario, you will find many lenders offering house loans. However, it is for you to decide the loan offered by which lender best suits your requirements. You must do your research regarding the best house loan interest rate, benefits, terms and conditions of all the loan options available to you.
Use a housing loan EMI calculator to get an idea of approximately how much you will be required to pay each month.
You must also ensure to read the terms and conditions carefully before applying for a housing loan from a certain financial company to help decode the house loan process in India.
After you have assessed how much fund you require, it is wise to start with your research as to which lender is offering maximum benefits and charging affordable interest rates. Once you have selected a lender, you can also consider applying for the house loan online.