Planning to take a home loan is a significant and crucial decision that you and your family realise to make their dream home a reality. While you may be taking a home loan to fulfill your dream, it holds a sizeable portion of your income, which makes it utterly important to understand the process and the best-suited plan for your requirements. In this article, we will discuss the things that you must keep in mind before taking out a home loan.
Eligibility Criteria
Checking the eligibility criteria should be the first and foremost thing to understand the amount of loan a bank can approve based on your age, qualification, job, financial stability, number of dependents, and spouse income. The bank also checks your credit or CIBIL score, which plays a vital role in getting your loan application approved. A score of more than 750 enables you to speed up the loan process, attracting the best interest rates and quick disbursals. While your CIBIL score and other factors are responsible for getting your home loan sanctioned, a pre-approved loan helps you negotiate the deal, expediting its closure.
Research
There are various kinds of loans available in the market, such as floating or adjustable loans, fixed-rate loans, and combination loans. Therefore, before you decide to take any of these home loans, it is important to explore every aspect of these loans from any bank or financial institution through extensive research — be it on the internet or by visiting them physically. Compare all of them based on the three crucial elements viz. down payment, EMI, and repayment tenure. These three crucial elements in each plan will help you choose the best plan with the lowest interest rate to ease your financial pressure. Calculate your cost of living and the other miscellaneous expenses to find out your affordability to purchase a home loan that meets your requirement. Besides, you must also research the credibility and reliability of the institution. A home loan should be taken from a financial institution with a successful track record of approvals and disbursements.
Documentation
The documentation process is the last process where you have checked the eligibility criteria and decided on the financial institution based on your extensive research on the home loan plan that meets your home loan requirements. Any financial institution will ask for KYC documents, income documents, and property documents. KYC documents include your Aadhaar card, PAN Card, Passport, Voter ID, Driving License, etc. For income documents, you may be asked for the documents depending upon your income. If you are a salaried individual, you may be asked to submit the last three months' slip, Form 16, and the last three years Income Tax Return with a bank statement. Under property documents, you must provide the property agreement to the bank or financial institution to sell the title deed.
Many people associate housing loans with risk, but with caution you can avoid paying higher interest rates. By following the above-mentioned points, you can save yourself from receiving misleading information. For more details, connect with our experts to make your home-buying journey fruitful.
