To have an own home is the dream of every person, but in this expensive world, it’s very daunting task for the middle class people to buy it. Well, you need to bother it, because Home Loan provided a way to purchase the home by paying EMI. Finance is also the other option for buying the home but, the interest rates are very high. Home loan is the long term loan that will help you to pay the small EMI for a tenure of 20 years or more than that. It varies depending on the lender and the applicant eligibility criteria.
It’s not an easy task to buy a home loan because the lender do the deep analysis of the applicant and based on the report they start the process of loan. Before taking a home loan you need to have a very good knowledge of the interest rates. Eligibility criteria and other points. In this article we are focusing on the basic points to take the home loans.
How many types of Home loan are there?
- Home extension loans
- NRI loans
- Short-term bridge loans
- Land loans
- Home improvement loans
- Home equity loans
- Converting high-interest loans
- Low-interest housing loans.
Who can apply for taking a Home loan?
For taking a home loan you no need to be a resident of India, you can also apply for a home loan, even before you’ve selected your property.
What is the amount one can get as a Home Loan?
Generally, an applicant can get the 80% of the amount as a loan of the property. But, it also depends on your eligibility criteria. A lender usually calculates the three to four times of the annual income of the applicant for sanctioning of the loan. It’s better to add your blood relation, spouse as your co-applicant to get the a higher loan amount. Based on the loan amount the EMI amount is calculated and that you need to pay every month, failed to pay that amount will lead you to get the remark in your credit score.
CIBIl is the company which takes care of the credit history of the applicant. Every lender first checks the CIBIL score of the applicant whenever they get the application from the applicant. If a person has good credit score they will get the loan amount with low interest rates for loan. If the applicant keeps on applying for the loan without checking the reason for rejection of the loan, for every rejection of your loan the CIBIL score will decrease,. The Lender considers putting that applicant in the black list and they offer a high rate of interest for that applicant. So in order to get your home loan application to get clear, you must first check your credit score from any credit score providing financial company, CIBIL is one of them where lender depend on to check the credit history of the applicant. If you find that your credit score is low then try to improve that.
How can you improve your Credit Score?
- By paying the previously taken loans on time
- Without crossing the deadlines
- Prepayment of the loans which you have.
- Less use of credit card
- Not maintaining more than one credit card
- Repayment of the credit card amount within the specified time not crossing the, limit, which make you pay the interest rates.
What factor Lender look at the applicant for sanctioning a Home Loan?
Lender first look at your credit score, age, salary, type of employment, qualification other sources of income apart from salary for salaried employees, sector of employment, position in organization, previous loans if any, criminal cases imposed on applicant, etc. Not only on the applicant, these factors are looked at co-applicant, in case if you’re adding a co-applicant for taking a home loan. You must also have all the ID proof, Address proofs, payslips and other legal documents, etc. The age of the property is also coming into consideration, if the home is more than a decade old, not too many companies will be in hurry to finance it.
How many types of interest rates are there in a home loan?
You have three options:
- Fixed Rate of Interest
- Floating Interest Rates
- Semi-Fixed Interest Rates
In fixed rate interest rate is fixed for some period. In Semi fixed rate the interest rate changes for a fixed interval of time and in Floating rate the interest rate keeps on changing for every quarter, it depends on the market conditions.
What are the other fees, you need to pay for applying a Home Loan?
- Processing fees
- Administrative fee
- Legal charges
- Technical charges
- Stamp duty and registration charges
- Personal guarantee form charges
- Cheque bounce charges
- Delayed payment charges
- Prepayment charges