Getting a housing loan is a significant financial commitment in anyone’s life. Today there is a lot of competition among home loan providers, making it very important to shop around a bit to find the best deal. It can be not very clear to know what to look for.
Things to Look For in A Home Loan in India –
When you set out to search for a suitable home loan, you may do well to follow this quick checklist that we have prepared for selecting a housing loan in India:
Interest Rate
A primary important factor is the interest rate. It determines your Earnest Monthly Instalments (EMIs). The higher the interest rate, the higher the home loan EMI. It may not fall within your budget.
You can also compare interest rates offered using a home loan interest rate calculator. To ensure that you are not being overcharged. You can then choose a lender who provides the best interest rates.
Required Documents
Before you approach a lender to apply for a home loan, you can keep the documents required for a home loan ready. Here are the primary documents that you might need:
- PAN card
- Driving license
- Voter ID card
- Passport
In addition, you would well keep a good stock of passport-size photos. Finally, if you are self-employed, you need to produce documents on your business, preferably for the last five years.
Whether you are a salaried or self-employed person, you would also need to provide proof of income tax filing and bank statements for the last six months.
Keep these documents required for a home loan, and you should be good to go.
Hidden Charges
It is common for borrowers to get their loans sanctioned only to find hidden charges that push the home loan EMI, making the loan more expensive.
Many lenders will put additional charges in the fine print or in obscure places in the application where you may not notice. Therefore, to prevent unpleasant surprises, thoroughly review the document before signing it.
Foreclosure Provisions
If by some good fortune, you find yourself in a position to pay up your loan before the end of the term, you should be able to do so. But, unfortunately, while no lender will prevent you from doing this, many lenders will apply a penalty for paying up your loan before the term, which is known as foreclosure.
Nowadays, many banks do not levy foreclosure charges. With this in mind, you would do well to check foreclosure clauses before you sign your home loan application.
Credit Rating
It would be best if you showed good credit behaviour for getting approved for a home loan or any loan, for that matter. Having a credit score of 750 or more can assure you smooth sailing for getting a home loan.
There are many ways that you can get a good credit score. However, the best way to have a good credit score is to reduce your outstanding debt, pay your bills promptly, and not default on payments.
Conclusion
A home loan is easy to procure with a bit of prior knowledge. Although it may seem overwhelming initially, ultimately, you need to keep a few basic things in mind and documents to keep ready.
Follow this checklist, and you will find that applying for a home loan and getting it approved is not all that difficult after all.
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