Home ownership is a distant dream for most individuals and finding the right house is just the first of many obstacles to home ownership. With the high value of real estate in India, buying a home is an expensive affair. If you are lucky enough to have found your dream house, the next step is to try and find the best deal to finance it.
As a home buyer availing of a home loan it is extremely important that you find a loan option that best suits your needs, as you will in all probability have to spend a decade or two paying off the EMIs. Choosing a home loan is often more critical and requires just as much foresight as does the task of choosing a home.
Tips to follow while availing property loans
- Choose the right type of property loan – The market for property loans is just as diverse as the real estate market and home owners have a wide variety of loan types to choose from. Before you begin searching for the most appropriate home loan, it will be beneficial to understand the different kinds of loans that are available, such as home purchase loan, improvement loans, home construction finance, extension loans, refinance loans, balance transfer loans, home conversion loans, NRI loans, and stamp duty finances.
- Assess your requirement – Before approaching banks with an application make it a point to calculate the total value of the property you are wish to acquire. The total cost should include not only the property value, but the stamp duty, registration charges, legal fees, and other related expenses. Once you’ve added all of this up, deduct the amount you have available with you. Doing so will give you the figure you need to avail as home finance.
- Determine your liquidity – Many people fail to take this important step and fall into deep trouble in the future. Buyers must make an approximation on the rise of their current incomes over the tenure of the loan. A similar estimate on all their expenses should be conducted. This will provide them with an idea on the amount that will be available to pay the EMI on their home loan.
- Spend some time on research – Making a home purchase is a big decision and should not be entered into hastily. Buyers should check out as many options as they possibly can before making the final choice. Similarly, while availing property loans, they need to research the various institutions that provide such loans. It is crucial that you check and compare variables, such as tenure, interest rate, prepayment penalties, processing charges, and other terms and conditions before making your decision.
- Talk to your friends or relatives – It is possible that your relatives or friends may have availed such funding in the recent past and it always helps to get insights from anyone with first-hand experience. This should help give you a better idea of what to expect and could also help avert any avoidable delays.
- Choose a reputed institution – While it’s important to save as much money as possible when choosing a loan, don’t settle for loans from lenders with low reputation. In such scenarios the long-term risks often outweigh any apparent short-term benefits.
Know more about home loans and their interest rates.
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