Owning a house is the most aspiring dream of every middle-class household in India. The moment a youth starts earning, he/ she is advised to invest in real estate by the elders of the family. Needless to say, real estate prices have enormously gone up to reach new heights. Despite strict government rules and regulations on builders, it is still very difficult for a common man to invest in a property on his savings alone. He/ She is bound to look before the banks and other financial institutions to fulfill his long awaited wish of owning a house. But, applying for a home loan needs a lot of groundwork, time and energy. Also, an investment of such scale requires enormous courage and self-discipline.
• Have you checked your CIBIL score?
CIBIL or the Credit Information Bureau of India Limited is an agency that provides credit score and reports to individuals. Banks check your CIBIL score before starting the approval process involved in any type of loan or credit card. The greater your CIBIL score, the greater is your chance of loan approval. It is estimated that around 75% of the loans approved are for the individuals whose CIBIL score is 750 or more.
• Are you okay with Lifestyle modification?
A home loan in your life requires a lot of sacrifices. You might be required to give up your short outstation trips, night boozing parties and a bunch of carefree shopping ideas. EMIs will go from your existing income. So if you are ready to allow these changes in your lifestyle, you are one step closer to your home loan.
• Is your income EMI ready
Another important aspect of applying for a home loan is your commitment to pay EMIs. It is said that an EMI should not exceed beyond 30% of your take home salary. Hence, it is advised never to take a larger loan than what you can repay. Another point to keep in mind is that the amount will be deducted monthly from your income. In most of the banks, the maximum tenure to repay your loan amount is 30 years. However, it is also suggested to keep the EMI tenure as short as possible. Note down your monthly expenses and check your savings. Check with other liabilities, existing loans etc. The sooner you pay off your debts; the more your investment will pay off.
• Have you thoroughly checked the property’s documents?
Builders say all good about their construction. Never trust blindly what they say about the land khata and other government and municipal approvals. Do a solid homework about the property you are interested in investing. Ask the builder whatever comes in your mind, such as, whether the property has all NOCs or the project has been approved by a bank or whether they provide occupancy and possession certificate without any hassle. What will be the mode of Khata transfer etc?However, banks will also verify the property and builders and validate them. You can also find the list of approved properties on the bank’s website.
• What is the Builder’s reputation?
It becomes indispensable to check the builder’s background and repute in the industry. Is the builder a known name? Has the builder delivered good projects earlier and on time? From when is the builder operating in the real estate industry?
If you have positive answers to the above questions, you are certainly getting ready to invest in your dream property. You can go through various banks websites, check their interest rates and decide based on your choice and preference and apply for home loan. Good Luck!