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WHAT TO ASK YOURSELF BEFORE APPLYING A HOME LOAN?

Posted on Monday July 12th, 2021

Taking a home loan is the best option to fulfill the dream of owning a house for most of the buyers. Nowadays, getting a home loan has become convenient and quite easier but there are certain things that a loan applicant should keep in mind before they Apply For Home Loan. These things include complete understanding of loan process, terms and conditions applied by lender, eligibility etc.

Making a checklist for all these factors is significant during a home loan as it is the biggest financial commitment for which you have to pay EMIs for long tenure until or unless you repay the whole amount with interest. In this article, we have listed few points that one should ask themselves before applying for a home loan.

√ Enough funds for down payment: However, you are securing funding from the lender to buy your home but you still need to make a down payment from your pocket. As per banking guidelines, lender can approve maximum of 80% of the total cost needed to purchase your home and rest of the 20%, you have to pay it from your pocket. As all know, price of the property is skyrocketing these days, and even paying a 20% is impossible for many. Therefore, it is important to analyze your affordability to pay down payment for the home loan.

√ Funds for financial emergency: Before applying a home loan application, one should also analyze the other expenses along with the finances needed for the down payment. After paying the down payment, do you acquire enough funds to face any financial emergency in the future? Life is unpredictable and no one knows what it throws at you at a certain point of life, so investing all your money in a home loan is never a great choice.

√ Negotiation with lender: Whosoever you finalize your lender, but always remember you have the right to negotiate about the interest rate charged on home loan and processing fees. If you are having a good credit score and low credit utilization ratio, it will make you eligible to negotiate with lender. It is a wise decision to check your CIBIL before applying any kind of loan as high credit score gives you the power of bargaining.

√ Estimated EMI: EMI meant for the equated monthly installment and one of the most important factors that decide the borrowing cost. This is the monthly installment you will be paying to repay the entire loan amount. There are innumerable online portals providing the home loan EMI calculator free of cost for use, where you can calculate your estimated EMI helping you to analyze your repayment capacity.

Hence, knowing all such factors, make your home loan borrowing quite easier and faster as you can Apply For Home Loan Online or offline at ShubhBank. You just have to fill out the home loan application form and submit the required documents to secure a loan. Try to keep the above mentioned factors in mind before making a final decision about home loan.


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DIFFERENT TYPES OF COSTS INVOLVED IN SECURING HOME LOAN

Posted on Monday January 27th, 2020

Having own house for an individual is the aspiration and dream of many life, as nobody wants to continue to pay the rent throughout their lifetime. Every person wants to get free from paying rent and for that, we have the benefit of home loan at ShubhBank which is the most beneficial loan in fulfilling your desire of having your own home. But before getting approved for home loan from the lenders may requires some amount of charges, which are basic costs and are levied form every financial and lending institutions. Generally, masses get so engrossed in the rates of interest and the EMI that they forget the hidden additional charges which are levied on them being borrower. Before applying you should have the proper knowledge of these different types of costs involved in securing home loan. Such of these costs are:

1. Loan Application fees- First of all, for processing your application, usually lenders require some amount of charges which may vary up to Rs.1000 to 5000. They are charged for the application purpose, to conduct the verification of your application and provided documents.

2. Processing Fees- Processing fees is the basic charge which gets deducted almost in every loan options, as it covers the cost of credit appraisal and it generally ranges between 0.50%- 2.0%, of the loan amount including the applicable taxes, which are levied.

3. Administration charges- When the loan quantum gets sanctioned from a lending institution, an administrative fee is charged. It varies from lender to lender regarding the charge.

4. Technical Valuation Charges- These are the charges which are regulated in the process of the assessment of the property. While you Apply For a Home Loan at least two valuations are done; these are generally done in the case of high value property.

5. Balance transfer charges- These charges are levied when the borrower wants to transfer his amount to another lender. And to do so, he/she is supposed to pay the balance transfer charges to the current lender from which he has a running loan to another lending institution to avail this feature.

6. Legal fee- The fee is charged for the scrutiny of provided legal documents that include the agreement of sales or purchase of property.

7. Pre-payment charges- These charges are levied when the borrower wants to prepay a specific amount of loan in full or in parts. But if you have floating rates with your loan quantum then there is no need to pay it, but if you have fixed interest rates running then it is applicable.

8. Notary fees- This fee is levied for the KYC (Know your customer) documents or for the POA (Power of attorney) , in which it is required to get notarized from any local notary. This is basically for the NRIs, who want Home Loans In India.

9. Documentation Fee- It is a mandatory fee which is charged after the loan agreement is signed and ECS (Electronic Clearance Service) is activated.