Points To Consider While Making Home Loan Decision
Buying a home is one of the biggest financial decisions that you will ever take in your life. Many people looking to invest in their own homes prefer to do that using a home loan.
A housing loan offers a considerable amount to an eligible borrower to buy a home of their choice. But a large number of people are unaware that they need to have the loan approval and many more important aspects.
It is where it becomes a must to consider a few elements before making a home loan decision. Read on and know more!
1) Keep your credit score higher
Your credit score is what helps your lender to know if you are creditworthy for a loan or not. If your CIBIL score is not robust, you may not get the housing loan approval. Hence, the first thing is to check your CIBIL score and maintain it well. Making timely repayments can help you do that easily. A credit score of 750 or more is what creditors consider on par.
2) Check out the applicable home loan interest rate
Even though an online home loan is a secured debt and comes with a lower rate of interest, you should check the applicable interest rate. To arrive at the best home loan interest rate in the market, you should compare all deals online. You can do that on a third-party platform for free. It can help you to pay lower EMIs and save on repayments.
3) What about the home loan tenor?
A home loan is a long-term commitment. Usually, a housing loan comes with a tenor of up to 20 years. But the question is how long it is good to save on repayments? If you go for a longer tenor, your home loan EMI will come down. But, you have to pay higher interest charges. On the other hand, a shorter duration means paying bigger EMIs. It may hurt your outlays. But the good news is that you can save a significant amount on selecting a shorter tenor. The best thing is to choose a tenor that’s not too long and also not very short.
4) How much home loan amount will you get?
If you have an idea about the exact home loan amount, you can begin searching for a property in that range. To avoid all issues, you can use the housing loan eligibility calculator. The tool is available on your lender’s website for free. The online tool shows a home loan amount that your current income can support.
5) What will be your home loan EMI amount per month?
Being aware of the exact home loan EMI amount earlier can help you decide if you can afford repayments or not. You should use the online housing loan EMI calculator. It shows your precise home loan EMI amount. You can also know about the payable home loan interest charges, along with the total loan cost (principal + interest). Based on your budget, you can vary your loan amount to increase or decrease the EMI figure.
6) The down payment amount
A home loan lender will not sanction the entire cost of your new home. About 10-20% of it needs to be arranged on your own. It is known as the down payment amount. Hence, you should start saving the down payment amount early. The higher is your down payment; the lower will be the borrowable amount. In turn, it can assist you in managing lower interest charges and pay reduced EMIs.
If you can consider the discussed pointers before your home loan applies the online step, it can help you approach and manage things better.
