Planning to make a big-ticket purchase like in a home always leaves us grappling with a range of queries. Although applying for a home loan online has made the process more convenient than before. The wide array of options and different offers from various lenders can seem mind-boggling.
Online Home loan calculators can help you assess the loan amount you are entitled to apply for. They even factor in the home loan interest rates and display the EMI amount that you would need to pay.
You should always use the home loan calculators on the websites of different lenders to check where you are getting the best deal. What you would be ideally looking for are a lower home loan interest rate and a longer loan repayment term.
While home loans play an indispensable role in purchasing property amid skyrocketing real estate prices, it pays to put in the extra effort to find the perfect home loan you can repay in a hassle-free manner. Below are a few tips to consider while evaluating various home loan offers.
Take your time
Do not be in a hurry to make your home purchase. Avoid settling for the first lender even if the loan offered sounds like a good deal. Compare and evaluate various housing loans offered by different lenders. Go through the fine points of the terms and conditions attached to the loan repayment process. Once you know your home loan eligibility amount, you can check if there are any additional schemes offered by the lenders.
Your Credit Score
Banks and other financial intermediaries always consider an applicant’s credit score before approving big-ticket loans. A credit score of 750 and above is considered ideal by most lenders. This increases the applicant’s chances of getting quick loan approval. A good credit score even entitles applicants to lower interest rates and favorable repayment terms.
However, if you have a low credit score, you can still try to enhance it. You will need to pay off your credit card dues and any outstanding loan EMIs. It will also be necessary for you to stop maxing out your credit cards. Once your repayment sheet is spotless, you will improve your chances of getting loan approval.
Taking a home loan is a long-term commitment. You will be pooling in your life savings into repaying the home loan for a considerable period of time. That’s why you must scout the property location carefully before you make your purchase decision.
You have to look out for the supply of basic amenities like water, its connectivity, and most importantly, if it’s a safe neighborhood. Places like markets, educational institutions, hospitals should all be within easy reach.
Even the lenders consider the location of the property to estimate the property cost and its future value. Lenders might even deny the loan application based on the property location or prefer to charge a higher rate of interest. A good locality will help you in getting the best rates on your home loan.
Pick the affordable loan
You might be eligible for a higher loan amount than the one you require. This does not mean that you should go and purchase a more expensive property. Taking a higher loan amount entails paying higher EMIs. The EMIs should be maintained at a level that you can repay easily. Besides, going in for a property that costs more also involves you making a larger downpayment. Everything should be planned conveniently as per your budget.
You must consider the above points while shopping around for a home loan. Comparing the loan offers by various lenders will help you identify the best deal. Always keep your credit score in mind before you apply for a home loan. All these points will enable you to find a home loan that fits your budget and requirements perfectly.