Buying a home is a dream-fulfilling but daunting experience. Right from selecting the right home to choosing the right lender that offers best home loans, there are many different things a homeowner is required to take care of. While help from a real estate expert can assist you to choose a home, this article is sure to answer some of the questions that you might have about home loans.
The choices that you make while taking a home loan have implications that last for a very long time. Needless to say, you should approach a home loan with precaution. Apart from selecting a lender amid all the available options, it is also very important to carefully understand your home loan requirements, the tenure of the loan, interest rates, EMI, and penalties, to make sure that the whole process of borrowing a loan and then repaying it is smooth.
Go through our list of important aspects of home loan one should not miss while opting for one:
- Home Loan Eligibility Criteria
NBFCs now offer some of the best home loans in India. However, not everyone is eligible for a home loan. Having a good job with adequate monthly income, regular payment of income tax, CIBIL score, etc. are some of the criteria that you need to fulfil to get a home loan. While every NBFC has its own home loan eligibility criteria, they are almost the same with some minor differences.
- Loan Types
Home loans in India are of two different types- floating and fixed. Floating interest rate changes with the market condition, whereas, the fixed interest rate does not rely on market conditions and usually remain the same throughout loan tenure. While a fixed interest home loan allows better planning of the finances as you are aware of the interest you will be required to pay; the interest rate is usually higher than floating rate.
The interest on home loans varies between lenders, so make sure that you shop around to choose the best. However, apart from the interest rate also check other terms and conditions before making any commitment.
- Tenure of the Loan
Choosing the tenure of the loan is one of the most important decisions. NBFCs usually offer a maximum tenure of 30 years. While higher tenure reduces the monthly EMI, they increase the outgo of interest. Thus, it is usually recommended that you should go for the shortest possible tenure that you can afford. Also, make sure that the EMI amount is something that you can easily pay month-after-month.
Non-payment or delayed payment of EMI will attract penalties, and you should make sure that you avoid such penalties by having a proper repayment schedule in place. Moreover, NBFCs can also take action against you if you do not pay the EMI for 3-4 months. Moreover, if you want to prepay the loan before the actual tenure, you will usually be required to pay a penalty for that as well.
While home loans are now widely available and help us achieve our dream of buying a house, it is very important to research and go through the terms and conditions of the home loan before making any commitment.