Things to Consider When Taking a Home Loan
Deciding on which property to purchase is hard work. If you’ve successfully done that, you’re already halfway there. If you haven’t, refer to Bajaj Finserv Property Search services ,which ensures that you get the exact home you’re looking for.
The next step is deciding upon a Home Loan. With so many lenders and institutions offering up attractive Home Loan plans, you could easily end up choosing the wrong one. Here’s your guide to what is important.
Steps to Consider Before Taking a Home Loan
Where to Begin
Though it may seem that the only hurdle in getting a loan is the application process, getting the actual sanction and disbursement can be a tedious task. Bajaj Finserv will help you make a clear cut decision with their transparent and affordable plans.
A common mistake is deciding on a Home Loan based on the interest rate. There are other, arguably more important, things one needs to consider before applying for a housing finance.
What You Should Actually Consider
Clearly things like eligibility, loan type, lender and other things play an important role when considering your Home Loan options. Interest rates although important, are reasonably over-rated. It’s easy to understand why it seems that interest rate is the make or break factor of a loan, and why the lowest rate of interest is so sought after.
There are two kinds of loan types in terms of interest – fixed and floating. Although the fixed loan type seems like the sensible choice, with so many other factors in play, you would do well to consider a floating interest rate too.
What you should be worried about, are the changes in the eligibility criteria, your credit score, and other hidden charges your lender may be imposing on you. Those charges are likely to be negotiable, so have a word with your loan manager before committing to a product.
You should also have an overall awareness of the tenure and how it affects the EMI status. Some things, however, are likely to remain the same across lenders, such as the documents required for the Home Loan.
Deciding upon a Lender
This is undoubtedly one of the most important decisions you will make. Some lenders may have tricky security clauses that entitle them to extra charges and payments for things that you may not consider accurate. For example, some security clauses work so that the lender is entitled to consider a default in the payment if the borrower expires or is involved in a criminal offense. These are not explicitly listed and it becomes important to read the documents before signing any.
Consider these hidden problems when comparing lenders. Bajaj Finserv is comparatively transparent and frank in dealing with consumers and provides a clear cut list of all applicable charges.
Lenders often have loopholes in their eligibility criteria list as well. How you apply for a Home Loan and the tenure you seek might make certain lenders wary of sanctioning a loan. Other unexpected factors include the number of dependents you may have, and your previous history in bill payments, bank account statements and already existing loans. Your credit rating too plays a major role.
Tenure, Deposits and Other Factors
The EMI (Equated Monthly Instalment) is calculated based upon the tenure of the loan, the size of the principal and the interest rate. The EMI is inversely related to the tenure. So, comparing the different EMI-to-Tenure rates of different lenders will give you a clearer idea of the options available.
Some lenders require a deposit to be made, which usually hovers somewhere around 5% of the total sanctioned mortgage. The Loan-To-Value (LTV) Ratio is also something important and is often overlooked. This is something that needs to be very well understood by those investing in resale property.
Remember that all of the above depends on the type of loan and your lender.
Bajaj Finserv provides its customers with 3 EMI free months, making it much easier for customers to plan their finances and repay their loan.