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5 THINGS TO CONSIDER BEFORE TAKING HOME LOAN

Posted on Tuesday September 17th, 2019

It is not always possible to have so many saving for purchasing a home when you are planning for it. The facility of home loans gives us the opportunity to own our dream home. Many banks and financial institutions give us tempting offers to avail best home loans. However, one must be careful to collect all the relevant information before opting for loan. It is crucial to understand all the terms and conditions of repayment. Once you make up your mind, the next step is borrowing the funds. Getting a home loan may appear a challenging task, but there are 5 things to consider before taking Home Loan to make it simple.

Affordability
The decision of buying home should be practical not emotional. The purchase of your dream home should not burn a hole in your pocket. You must check beforehand whether the down payment and the EMIs are within your income range or not. The down payment should be planned in a way that you still have the money to meet any emergency.

Comparing the Lenders
One should do enough research to decide on the lender or the financial institution. Do check all the terms and conditions, the lender offering and what exactly suits your requirements. While searching the lenders, consider both quantitative and qualitative aspects of the loan. The interest rate is important and may not vary much between the lenders but the customer service and other such features may differ extensively. You must consider these things properly to manage them throughout your loan tenure.

Rates of interest
People always look for loans that come with lower interest rates. Before making any decision, you must have the clear understanding on the calculation of interest rates. The fixed rates of interest are generally higher; the monthly EMIs would obviously be higher. So, it is always better to go for floating rate of interest on your loan. Keep a check of the interest rate trend. It would be better to have a timely follow up with the lender so that you can save on interest, when the rate changes.

Loan Tenure
The longer tenure helps you to secure more affordable EMIs that mean you finish off paying more interest. Consequently, your dream home costs you more. People who have started working, it is apt to choose long tenure as affordability would be a major concern but in later years of life, it gets difficult to manage long tenure loans.

Credit Report
Every bank or financial institution checks for your credit score before approving the loan. Credit score represents your financial life until now. With this, the lender reviews your financial credibility and the risk associated with your past payments. It is important to know your credit score from the CIBIL website that help you to fix any mistakes in the score.
Though Home Loan From ShubhBank offers a nice opportunity to buy home and it’s your duty to understand the terms and conditions associated with it to enjoy the benefits and save money.