Financial institutions, housing finance companies and NBFCs like Tata Capital offer home loans to help you to realize your dream. So, if you don’t have access to funds but have a steady income you can always opt for a home loan to buy your dream home.But before you rush headlong into availing a home loan a little bit of homework help you can understand the pros and cons of taking a home loan. If you don’t, then you could be in a spot of bother.
Here are 9 checks that you should conduct before you take that all-important housing loan.
1. Check for loan eligibility from lenders
Even before you start looking for the home of your choice you need to ascertain how much you can afford to spend. This can depend upon your sources of income and the amount of down payment you can make. You can check for home loan eligibility at our website.
2. Check if your income can repay a home loan
Check if your current and future income can comfortably repay the home loan without affecting your lifestyle too much.
3. Check if you have a high credit score
All lenders look for a high credit score because they want to make sure that you can repay the home loan. If your credit score is not above 750 take steps to ensure it goes above 750. If you have taken other loans and are paying them promptly you don’t have to worry too much.
4. Check if you can close other loans
Remember that home loans offer the lowest interest rate and therefore it makes sense to close all other loans so that your credit score can be high and allow you to get the best terms including the highest eligibility, the lowest interest rate and the longest tenure.
5. Check the antecedents of the home you buy
Ensure the builder has a sound reputation for quality and timely delivery. Inspect all the documents thoroughly and get them vetted by your own legal counsel even though lenders would also perform legal scrutiny through their own legal counsels. Importantly, check if the builder is on the approved list of the lender.
6. Check for home loan terms and conditions
Many home loan borrowers do not read the terms and conditions affecting the home loan. You should ensure you read all of them thoroughly and understand the implications well before you make decisions. For instance, you can decide between fixed rate and floating rate, you can choose the EMI you are comfortable with and you can choose to take a lesser home loan amount than what you are eligible for. Pay particular attention to fees and charges as they can prove costly whenever you default a payment. Check your Home Loan fees and charges by visiting our website.
7. Check if you can add co-applicants
You can increase the home loan amount by adding co-applicants who are earning members. The combined income of the co-applicants will help you to opt for a higher loan amount. However, check the terms and conditions under which lenders would allow co-applicants.
8. Check availability of all relevant documents
Once you have decided, conduct a check of all the relevant documents needed to apply for the home loan. You will need the latest updated documents that may include your salary particulars, ITRs, bank statements, property documents, tax-paid receipts, and valuation reports, identity documents including proof of address, current loans and credit report.
While the above 8 checks are by no means exhaustive, we urge you to follow them and evaluate the pros and cons of taking that all important home loan that can secure you the home security you crave for.