PERFECT GUIDE OF INSTRUCTIONS BEFORE APPLYING FOR HOME LOANS 

Buying a home in India is a personal achievement that is no less than a dream that may come true for many and applying for a home loan is an exciting step and considered as the first one in the journey of owning your home and most of us are likely to rely on the financial assistance the form of various things, including a home loan to buy the property of their own dream.

The interest rates of the home loan are multi-year low and the real estate prices of various properties that are residential have remained largely stagnant over the last few years. 

There are various stories of individuals who are saving their pennies to achieve the goal of buying their own house in a great metropolitical city. In Kolkata, there are a variety of flats from a 1 BHK to 4 BHK luxurious flat. There has been a huge upgrade in the real estate market, due to the huge selling of 3 BHK flats.

A home Loan is a financial commitment that is beneficial in the long term and it actually spreads over a time span of around 20 to 25 years and just a single misstep could cost you not only the money but also your Peace of Mind. There are just minor differences between one lender and another one, and the journal procedure that you can use and what steps you need to make sure while applying for the home loan are listed below. 

Get My Ghar is providing you with the best information that you all need to know before buying your dream house whether it be a 1 BHK flat or a 3 BHK flat in Kolkata by the home loan. Keep some crucial points in your mind while applying for a home loan if you already have an eye on the suitable and your dream house of your own choice.

A) Home loan processing and other charges –

The first thing that buyers look at is the interest rate on the home loans when they are considering or applying for a home loan. Interest rate is not only a type of charge which is related to the home loan, but also you need to know about the processing fees, the forklift charges, or the payments regarding the late penalties.

The overall fees related to the processing of the home loan are considered between the range of 0.5% to 2% and it actually doesn’t seem like a lot, but you need to consider the real amount and it is a considerable sum of money.  

Sometimes while applying for a home loan, people may find out other kinds of costs that are associated with the loan amount, which consists of documentation charges or GST charges. If you are buying an apartment at a new estate you would be provided with a bunch of upgraded amenities. There are a number of insurers that are trying to cross-sell various insurance policies along with the home loan to the person who has applied for which will further show an increase in the total cost of a home loan. 

B) Rate of interest in Home Loan

In the rate of interest, there are various factors, which include the EMI stands for equated monthly installments and the principal component. The interest is basically charged on the basis of reducing the balance, which actually means that the principal component comes down with each EMI payment by the buyer. Currently, as per the statistics, the home loan rate of interest is as low as 6.65% per annum.

Even during the pandemic due to a decrease in flat rates people have been rushing to get themselves a 3 BHK flat. Now the banks offer a discount of 0.05% if a woman borrows a home loan. So, if a person is deciding to buy a home loan, then he is advised to take a joint home loan with a co-borrower as a woman. 

The rate of interest varies on the tenure of the loan and the estimated EMI for different tenures are different. For example, the EMI per INR 10 lakhs is 11,431 for the tenure of 10 years and the EMI for the same tenure for women is 11,406 while for the tenure of 25 years EMI per INR 10 Lakhs is 6846 but EMI for women is 6815. It means there is a 0.05% discount in the EMI for the woman. 

C) Down payment 

Most lenders or lending institutes only offer a part of the whole property value which is approximately 75% to 90% as the loan and the remaining amount has to be arranged by the applicant from their own sources as the down payment amount. The range of the loans that are provided by the lenders or the lending institute depends on the eligibility of the applicant or the cost of the property.

The eligibility for the amount of the whole loan depends on certain factors, that includes income, age, tenure of loan, and the credit score. Along with this, the candidate needs to check that they are eligible for any kind of pre-approved offer available on the home loans.

In order to get a pre-approved loan, the Candidate needs to apply for the loan application which will be further processed on the basis of the income of the candidate and repayment capacity. Once the bank completes the process, the candidate will receive in-principle loan approval. 

Ideally, for the down payment concept the borrowers can either go for a minimum down payment or voluntary to pay more in order to reduce the burden of interest. 

D) Compare Home Loan offers with different lenders –

Comparison is one of the most important and challenging tasks when it comes to comparing the two different lenders that offer varieties of home loans. The one who offers a home loan at a lower interest rate may tell you to give a high processing charge along with the associated charges while the other one can do the reverse. That’s why we need to discover more and more regarding home loans while choosing the best known for your home. 

For comparing the home loans of different lenders, first of all, we need to compare the interest rate and then the corresponding EMI payable for the chosen tenure. For example, 15-20 years and then followed by the processing fees and the total payable amount.

The bank which will charge you low-interest rates with low EMI monthly and low processing fees will be considered as much better than the other ones. For this kind of comparison, you can refer to the Home Loan Calculators or you can create a comparison table between those banks and then choose the bank which is going to be perfect for your home loan. 

E) Comparison between bank and NBFC –

Comparison is necessary, not only between the different lenders but also between the bank and the NBFC which is a non-Banking financial company that offers home loans. Banks generally have their stringent eligibility criteria and then the disbursal or processing of the loan may take longer than expected.

While with NBFC it might get easier to take a home loan, you also need to look at the interest rate that they are providing you. Typically, NBFC charges a higher interest rate in comparison with the bank, since the home loan repayment could go for as long as 25 to 30 years, even a slight difference in the amount of the interest rates may imply a considerable amount to be repaid besides the principal. 

F) Documents –

While taking the home loan, it is very necessary to have documentary proof regarding various things, especially income which will vary depending on whether you are salaried as a professional or as a businessman.

On the basis of the source of your income, it may be asked to you for the last three years’ income tax returns, which may be self-or-business. The last three-year profit, as well as loss balance sheet, includes the last six months’ bank statement and GST returns as well. 

G) Conclusion –

Purchasing the house of your dreams is one of the most important and the best experiences you will ever have in your life. But opting for a home loan to buy that Dream House does require that diligence at your end.

There are multiple points that are mentioned and you need to consider all those points carefully while going to apply for a home loan and this may help you to segregate the offering and land on one that is perfect for you and your family. It’s time to make a powerful and wise decision and to take action to get your home loan by consulting with the best lenders and making the right choice by keeping the interest costs low.

A home loan is one of the best ways will help you to buy your dream house of your own. Having a difference of a few percentage points can result in several savings of lacs of rupees and this may help you in your future as well.