Saturday, January 28, 2023
  • Contact
  • Write For Us
  • About Us
  • Privacy Policy
  • Editorial Guidelines
Hesper Herald Daily News
  • Home
  • News
  • Politics
  • Business
  • Technology
  • Culture
  • Lifestyle
  • Travel
  • Health
  • Login
No Result
View All Result
Hesper Herald Daily News
Home Finance

Consider These Top 10 Tips While Getting a Home Loan

Charlie Goode by Charlie Goode
March 3, 2022
in Finance
0
Consider These Top 10 Tips While Getting a Home Loan
0
SHARES
31
VIEWS
Share on FacebookShare on Twitter

Purchasing a house is a crucial decision – it is after all a lifetime investment. In a bid to buy their dream house, many people choose to opt for a housing loan without being aware of its various aspects. This is particularly true for amateurs who have no prior knowledge of the financial market, pros and cons of availing such a loan, and the formalities involved. However, to make things easier, this article will guide you through the important points to consider when applying for a home loan. 

Things to Consider When Taking a Housing Loan

 

1.      Credit Score

The most important factor to consider is the credit or CIBIL score. This score represents the borrower’s creditworthiness. In simple words, your credit score determines whether or not you are reliable and capable of paying back the borrowed amount based on past records. While credit score varies between 300 and 900, a higher score is desirable as it puts you in a better position in the eyes of the lender. Most lenders consider a score of 725 and above ideal for home loan. Besides, a good score also fetches you better interest rates. To maintain the desired CIBIL score, ensure that you clear your credit card dues and any outstanding loans on time. 

Related posts

December Retail Figures – Consumers Starting To Cut Back, But Real Test Still To Come

December Retail Figures – Consumers Starting To Cut Back, But Real Test Still To Come

January 20, 2023
The European countries with the most graduate finance jobs

The European countries with the most graduate finance jobs

January 18, 2023

2.      Rate of Interest 

Interest rates on housing loans depend on several factors and typically vary from one lender to another. Therefore, compare different rates offered by lenders in the market to get the best deal. For salaried individuals, the current home loan interest rate stands between 6.65% and 14%. Also, find out if the lender is offering fixed or floating rate of interest. Under fixed rates, the monthly EMIs remain constant over the loan tenor. However, under the floating rates, though the EMIs don’t vary over the home loan tenor, the interest is calculated depending on the MCLR and varies over time. This may prove beneficial as interest rates are often expected to go down in the long term. 

3.      Home Loan Tenor

Before availing of a housing loan, consider the length of the loan tenor – your monthly EMIs will depend on the chosen period. Banks and lending institutions usually offer an average repayment period up to 20 years. Such flexible tenors provide borrowers with ample time to pay off the amount comfortably. However, you may consider opting for a shorter tenor if you have enough funds in hand. This is recommended because although a shorter tenor increases your monthly instalments, it does reduce the housing loan cost eventually. 

4.      Home Loan Tax Benefit

Under Section 80C and Section 24 of the Income Tax Act, you can claim home loan tax benefit on the principal amount and the amount paid on the current home loan interest rate, respectively. Furthermore, first time purchasers can avail additional tax benefits under Section 80EE. 

5.      Processing Fees

This refers to the charge payable to the lender for the processing of the home loan. Usually the processing fee ranges from 0.80% to 1.20%. Get in touch with your lender to settle for the lowest processing charge. 

6.      Monthly EMIs

Your Equated monthly instalments are payments made every month towards repayment of the borrowed loan. This amount is often determined based on the down payment made at the time of purchase. The higher the down payment, the lower will be the monthly EMIs. Thus, it is recommended that your EMIs do not exceed 45% of your total income. A housing loan EMI calculator can help you determine the desired amount in such cases. 

7.      Down Payment

When opting for a home loan, lenders typically require you to pay about 15% of the total loan amount as down payment. The remaining amount is then converted into monthly EMIs. A smart thing to do is to increase your down payment if there’s surplus cash in hand since that will help you save up on the payable interest rates in the long run. 

8.      House Loan Documents

Be sure to carefully go through all the terms and conditions by your chosen lender before signing on the dotted line. You must also keep all the necessary documents (original and photocopy) in place to ensure a smooth application procedure. 

9.      Prepayment Charges

As per RBI guidelines, borrowers need not pay any prepayment charges, so you can choose to make partial payments as per convenience or provided you have sufficient funds. 

10. Foreclosure Norms

Housing loan foreclosure refers to when you repay the outstanding loan amount before the end of the home loan tenure. The sooner you pay, the lesser rate of interest you pay. Lenders usually charge a nominal penalty for making repayments beforehand. However, if you opt for floating interest rates, you need not pay any foreclosure fees.  Applying for a housing loan involves multiple factors that need to be taken into account. Run through the points mentioned above to ensure that you are on track. Check with the lender before initiating the paperwork.

Previous Post

Ways to Choose an Ideal Digital Marketing Company for your Local Business

Next Post

Know All About How to Secure a Loan Against Property Smoothly

Next Post
Know All About How to Secure a Loan Against Property Smoothly

Know All About How to Secure a Loan Against Property Smoothly

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

Bitcoin

Swedish Authorities Owe $1.5 Million To Three Drug Traffickers

1 year ago
SP8YA Soundbar

The Soundbar To Accompany Your LG TV, The SP8YA

1 year ago
How to Find the Best Electricity Providers Near You and Save on Your Bills

How to Find the Best Electricity Providers Near You and Save on Your Bills

7 months ago
Today The Smart Device That Is Part Of Lives Of Many Families Has A Birthday

Today The Smart Device That Is Part Of Lives Of Many Families Has A Birthday

1 year ago

FOLLOW US

BROWSE BY CATEGORIES

  • Automotive
  • Blog
  • Business
  • Culture
  • Education
  • Finance
  • Food & Drinks
  • Health
  • History
  • Home Improvement
  • Law
  • Lifestyle
  • News
  • Politics
  • Property
  • Sport
  • Technology
  • Travel
  • Uncategorized
PR Fire International Press Release Distribution

BROWSE BY TOPICS

bad weather brownfield sites business administration qualification business training cleaning colour psychology exams FANUC fast food logos fast food restaurants flood zones Global Wellness Summit Hannah Beko HMO Property Designs home features house aesthetics House Buy Fast house design house interest Jonathan Rolande language barrir Liz Truss Marion Plant MBA Midland Academies Trust mobile phone law mythbusting National Association of Property Buyers Neil Debenham new legislation oil theft PDSA protecting your home Quotezone.co.uk refugees revision methods revision tips rural areas Scorpion Vision technology Ukraine Vivek Singh wedding wedding suit wedding suit style
PR Fire International Press Release Distribution

POPULAR NEWS

  • What Causes Sharp Stabbing Pain in Right Side Under Rib?

    What Causes Sharp Stabbing Pain in Right Side Under Rib?

    0 shares
    Share 0 Tweet 0
  • An Ultimate Guide to Med Beds Technology

    0 shares
    Share 0 Tweet 0
  • NASA Confirms That Asteroid Bennu Poses A Threat To Earth

    0 shares
    Share 0 Tweet 0
  • What is the Difference Between a Modem and a Router?

    0 shares
    Share 0 Tweet 0
  • Persán Buys Land In Poland For Its New Factory

    0 shares
    Share 0 Tweet 0
  • Contact
  • Write For Us
  • About Us
  • Privacy Policy
  • Editorial Guidelines

© 2020 Hesper Herald

No Result
View All Result
  • Home
  • Politics
  • News
  • Business
  • Culture
  • Lifestyle
  • Travel

© 2020 Hesper Herald

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In