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WHAT TO CONSIDER BEFORE MAKING A BUDGET FOR HOME LOAN?

Posted on Friday January 14th, 2022

Buying your own house is one of the biggest financial goals you will ever be a part of because in our country, a loan against home can be offered up to 25-30 years. Therefore, one needs a lot of patience and determination when it comes to Apply For Home Loan. One of the main reasons behind the longer tenure of home loan in India is due to sky rocketing prices in real estate business.

Of course, home loan is not a cheap deal as it cost you in lacs or even in crores. This big chunk of money is not an easy task to arrange at such an early age of 25-30. Hence, most of the individuals take the help of home loan in our country to fulfill the wish of owning a home. Since, it is an affair of huge amount and at early age you are not able to accumulate such wealth, so we have listed few things to consider before making a budget for home loan.

Well, following such thing, one must be able to save enough funds for the down-payment. Let’s have a look on those tips:

Plan a Budget: It is the thing that can be easily learnt from your parents. Planning a budget will help you to understand your spending habits in a better way. Start it by writing down your monthly earning following the list of your fixed expenses like electricity bills, water bills, groceries, rent etc. In the end, you can conclude what you are left with and how much you can save from your monthly income.

Start an Investment plan: Sometimes, savings are not the only solution to your long-term financial goals. If you are working hard to earn a smart salary or profits from your business, then let your savings work hard too. Try to invest in mutual funds, equity funds or other government securities to earn a good amount from there too. As long as you give it a time frame, like 3-5 years, you can expect great returns and profits from your investment plans.

Improve your Credit Score: Always be aware of your Credit Score as it is very important to secure any loan in your future. It is necessary to pay your credit card bills and existing loan EMIs on time. When your credit score is above 750+, the lending institutions term you as a trustworthy borrower and hence will allow you to secure the home loan at lowest interest rates. Therefore, keep an eye on your credit score as any sort of discount matters, as it saves you a lot of money on interest.

At the end, we can say that purchasing a home is a big decision and needs a lot of money. Therefore, if you don’t have enough funds for the down-payment of home loan, then it’s a right time to start planning a budget, investment plan or savings. When you feel ready, just Apply For Home Loan Online or offline at ShubhBank to borrow a right deal to buy your own dream house.


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WHAT ARE THE PROS AND CONS OF JOINT HOME LOAN?

Posted on Thursday March 4th, 2021

Joint home loan is one of the best financial products by lending institution to hedge their mortgage risk. Most of the lenders insist on joint home loan these days, even if the property to be pledged is bought in a single owner’s name. The key advantage of taking this loan is the home loan tax benefits and the other thing that is quite interesting, adding your earning or non-earning spouse as a co-applicant. If you Apply For Home Loan jointly, it makes your repayment capability higher. As every cloud has a silver lining, so do the joint home loan. Let us understand the pros and cons of this loan which are mentioned below:

Advantages of Joint Home Loan

♦ Higher loan quantum: You can apply for loan jointly with your partner, siblings or children to get your loan quantum increased substantially. Every lender sees the borrower’s net monthly income and then finalizes the loan money to be disbursed. Usually, the lending institution would offer a loan on which the monthly installment could be as high as half of the monthly income.

♦ Tax benefits: If your co-applicant is co-owner of house with you, then you can both claim the tax benefits. There is deduction from the taxable income on both the principal repayment as well as interest to be paid, hence, bringing down the overall tax liability of borrowers. Therefore, a home loan jointly allows co-applicants to double the tax deduction benefits from a single housing loan.

♦ Flexible repayment: If you are applying for home loan jointly, it is not necessary that both the applicants have to repay equally towards the principal amount and interest payment. It entirely depends upon the borrower to decide how much each of the borrowers contributes towards EMI.

Disadvantages of Joint Home Loan

♦ Delayed Documentation: As the two applicants Apply For Home Loan Online or offline, so lender will take more time to complete the documentation check. This time lapse occurs as authorities take longer time to ensure that documents submitted by applicants are genuine and not forged. The entire process of document verification is repeated two or three times depending upon the number of co-applicants who have applied for loan.

♦ Impact on CIBIL score: As the joint home loan gives you the advantage of flexibility on repayment but it also have a disadvantage because if any of the two applicants defaults on repayment then the credit score of both of the borrowers would face the brunt as any default on the EMI could negatively affect your credit history.

♦ Divorce or Demise: In case if the co-borrower decides to move out of a loan due to divorce then it is the responsibility of first applicant to repay the whole loan. In other case, if one of the co-applicants passes away then the surviving spouse have to take the charge of repaying the entire loan amount. It is advisable to avail separate life insurance policies to decrease the financial load on one applicant in case of demise or separation.


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HOW TO INCREASE YOUR HOME LOAN ELIGIBILITY?

Posted on Thursday February 18th, 2021

Nowadays, home loan market is growing with every passing day and easily available to the common masses. Though it is easily accessible, therefore, one should be aware of the loan quantum that can be approved to him/her. Thus, it is advisable to research properly and understand completely about the home loan eligibility. So, before you Apply For Home Loan it is highly recommended for you to check your eligibility as well as affordability.

Loan eligibility is a term given to specify your affordability. It reflects how much loan money you will get through home loan. The eligibility is determined by various factors which include borrower’s age, income, employment, CIBIL score and many more depending upon the norms of particular lending institution. The factors that help in enhancing the home eligibility involves a good repayment history, regular source of income, co-applicant/co-borrower, low credit utilization ratio etc.

There are some tips and tricks to increase your home loan eligibility and to secure a loan quantum that you desire. In this article, we are discussing some tips to enhance your eligibility which is mentioned below:

→ Adding a co-applicant: Signing a home loan agreement with your spouse or your partner as a co-borrower can increase your eligibility. By doing so, you can also get approved for higher loan quantum from the particular financial institution. As a matter of fact, co-borrower can be your life partner, your sibling or any other family members. Adding co-applicant can increase your EMI affordability and lender find it more secure to lend you the money. Some of the lenders also get ready to lend a loan at comparatively low rate of interest.

→ Adding second source of income: Another source of income can help you to increase your eligibility for home loan. A second source of income can be your rental income, part-time job, rent from farms, share etc. Adding any of these on top of your monthly income reflects your good financial health and hence, lending institution find it secure to approve you a higher loan quantum.

→ Improve your credit score: It is one of the key factors that decide your loan approval or rejection either you Apply For Home Loan Online or offline. It is one of the most important components which decide the loan money which will be approved for you. Lenders find it secure to lend money to the person having good credit score as it indicates good repayment history of yours. Therefore, if you are planning to take a home loan, check your CIBIL score first. If you find it low, then try to improve it.

→ Repay your existing debts: The repayment of existing debts not only help you to build a good CIBIL score but also help you to decrease the credit utilization ratio which further enhances your home loan eligibility. Moreover, having some additional savings and investments can also add up to your eligibility.

Hence, these are some of the tips and tricks that you can follow to increase your Home Loan Eligibility and make the loan journey easy and convenient for you.