Thinking of Buying a Dream House? Check the 6 Factors while opting out for Housing Loan

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housing loan

Owning a dream home is a big investment, and individuals need to do proper homework to make an informed decision. Although the easy credit availability and affordable interest rates lure individuals to borrow a substantial housing loan, they need to ensure effective debt management.

While considering a housing loan, some parameters need to be considered. Knowing these parameters will help an applicant to settle for the most attractive deals. It also helps clear the debts faster. The applicant needs to check RBI guidelines for home loans as well as several factors before opting for a housing loan. Here is the list of 6 factors.

6 Factors to Consider While Opting for a Housing Loan

 

1.     Eligibility Criteria

The eligibility criterion is one of the most important factors affecting housing loan approval. A prospective borrower needs to scrutinize this factor carefully. Additionally, the eligibility criteria also vary with employment types that individuals need to consider.

a)      Home loan eligibility for salaried applicants 

       An applicant should be a citizen of India.

       An applicant should be between 23 -62 years of age.

       Work experience should be more than 3 years.

b)     Home loan eligibility for self-employed individuals

       They should be a citizen of India.

       Age bracket for self-employed applicants is 25-70 years of age.

       A self-employed applicant should have a current business running for more than 5 years.

Besides, individuals may also need to meet lender-specific housing loan eligibility.

2.     Interest Rate

The interest rate is one of the important factors that a borrower should consider. The interest rate can either be floating or fixed. Borrowers should consider using a home loan interest calculator for Better estimation.

3.     Tenor

A longer tenor is considered beneficial for the borrowers. It lets the borrowers opt for shorter EMIs, which are easier to pay. But, in this case, you need to pay more interest in the long run. Hence, you should decide on the loan tenor that suits your repayment capacity.

4.     Processing Fee

Lenders levy a processing fee to process an applicant’s home loan application. This fee varies with lenders, so before settling for a lender, considers a lender with an affordable processing fee. Usually, it ranges from 1% to 3% of loan amount. However, lenders often charge lower processing fees during festival offers.

5.     Down Payment

When a down payment is on the higher side, the loan chances for loan approval are higher. Since higher down payment means lower loan amount, it becomes easier to repay, and lenders can also ascertain timely repayment. However, individuals also need to know how to apply for a home loan and its approval and disbursal timing.

6.     Application process

Firstly, an applicant needs to fill out the application form correctly. A representative of your preferred lender will contact you concerning the required documents.

After home loan document collection, those will be processed and verified for authenticity. Now, you will receive a sanction letter from the lender. After that, you have to pay the minimum amount for processing.

Finally, after the property and documentation verification, the housing loan amount will be disbursed. This will be accompanied by an agreement.    

Before applying for a home loan, a prospective borrower should verify the eligibility. Some factors differ from lender to lender.  Among borrowers, the application process for housing loans might be confusing.

In India, leading HFCs also offer pre-approved offers to streamline the loan application process. Additionally, these offers are available for a number of financial products like LAP, home loans etc. In order to check pre-approved offers, a borrower needs to enter personal details like name and contact number.

Hence, all the above mentioned points are necessary to know before availing the housing loan to ensure a stress-free borrowing experience.

 

 

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