Opting for a home loan is applying for credit from a financial institution to fulfill the dreams of buying a new home at the best possible early age. The borrower can avail of the loans up to a maximum of 30 years, depending on the applicant’s age. The borrower can also help with tax benefits on the home loan under the income tax act 80C allowing the borrower to save money on tax payments up to a specific exemption limit. The interest charges to be paid by the borrower are calculated on a compound interest basis; thus, the re-payment liability is very high on the borrower. The borrower needs to submit all the necessary documents to the lender to obtain the loans. The borrower needs to submit government id proof, income tax documents, income proof statement, employment proof. etc
While the customer opts for home loans, it helps the borrower buy a home early age and boosts the real estate industry. At the same time applying for the loans, the borrower needs to ensure that the applicant should have proper employment proof, salary proof & a stable job. Even the loan applicant may sometimes have to submit the no-objection certificate to the employer. The borrower’s loan eligibility depends upon the borrower’s type of property chosen, the borrower, type of employment of the borrower. The joint co-owner can even borrow the loans, which also apply for the home loan to repay.
Following are the points to be considered while applying for home loans:
Ensure the eligibility criteria of the loans as per salary:
The borrower should check with the EMI calculator on the bank’s website. The borrower can put all the details of the applicant like age of the applicant, loan tenure, monthly salary of the applicant; thus, by putting all these details, the borrower can get the exact details of the loan amount borrower can receive a loan. The borrower should have exact salary proof, employment proof & NOC from the employer.
Selection of the bank/financial institution while applying for a home loan:
The borrower can choose the loan options from multiple consortiums to avail the loans from one of the best leading financial institutions to opt for. The borrower can check from various lending financial institutions to avail the loans and avail the best possible interest rates in the lowest possible way. The borrower should also consider the financial stability of the lending financial institution to avoid getting defrauded by the finance company. It can lead to many problems related to the transfer of the property on an individual basis. Also, the borrower can check with the reviews of, lender regarding the past user experience, like whether any hidden charges were being later revealed to the borrower. The improper process of the recovery is done while delaying in payments, excessive harassment being faced by the borrower.
Check for CIBIL score as well as the bank balance:
The borrower can get the cibil score by own by going to some commercial finance website to know the exact cibil score. As for the good or excellent cibil score, the borrower can get applicant loan approval for the home loan. If the borrower has a poor or below average cibil score, the application needs to make their cibil score better to get an easy credit facility. The applicant can start making credit card bill payments to improve the score. Also, the borrower should maintain a good bank balance, which can give the lender confidence to avail the loans clearly and transparently.
While applying for new construction projects, prefer the banks from which the project is already being approved:
The borrower can check for the banks from which the project is already approved, applying amongst those particular banks or finance companies as all the documentation process is being verified by the banks to clear the loan process. The banks usually do a thorough verification check of the real estate site, giving the borrower a surety to confirm the construction site’s legal documents.
Check the re-payment of the interest amount, ensure assurance of re-payment & terms of conditions of the borrower:
The borrower should adequately check with the loan the exact interest amount to be paid to the lender. The re-payment terms & conditions should be thoroughly be checked by the borrower. They should also check with the charges being applied for the application fee, costs to be levied in case of the monthly installment delay. The applicant should consider consideration the monthly installment being liable to be paid to the lender, thus also thinking that it should not overburden the borrower as in some instances there could be no provision left for fulfilling remaining liabilities.
Thus the borrower should consider all the above points regarding the loan approval & re-payment process to avoid getting mislead by the borrower. The borrower should compare all the bank interest rates and then opt for the one that charges the lowest interest rates. Also, should consider the re-payment based on monthly income and the stability of the job.