Owning a house is a dream for all and most of them need a loan for the same. As the amount involved shall be high there are lots of questions in the mind of the loan applicant. To make things simpler for the loan applicants, we have put down a list of common queries.
Do I need a house?
Yes, every individual needs a house where he is the owner. In a rented house, we pay rent every month and there is no hope of us owning that house, even though almost the same amount is to be paid as EMI and after the loan tenure is completed, we are sure that we shall become owners of the property.
Whom should I contact for a loan?
Financial institutions along with banks can be contacted if the loan has to be taken. The individuals who need loan have to contact the representatives from financial institutions and banks or apply online for seeking help in the further process.
How much loan shall I get?
In India, CIBIL score is taken as a base to disburse loans. This score is dependent on various factors like previous loan repayments, how is the individual borrowing and repayment pattern of the individual.
Which loan to take?
Home loan interest rates are of two types, one being where the rate of interest rates are fixed and the other where rates are variable. In the case of fixed rate home loans, the rates shall be the same through the loan period. But in the case of floating rate home loans, the rates shall vary from time to time depending on the market rate and the lender.
Should payment be done only as per schedule?
The scheduled payment is to be done as per pre-decided schedule, and if an individual has the extra amount that he can part with, then it can also be paid towards loan repayment and the same shall be deducted.
How shall principal & interest be calculated?
In the initial stage, the interest shall be more and later it shall be less and principal shall be vice-versa.
Should extra amount be paid initially?
Documentation charges, registration charges, and search charges are to be paid in cash initially as the financial institute personnel has to visit the property location etc.
Should insurance be done?
Yes, nowadays it is insisted as the lender wants to feel secure when the loan is being given by them and the insurance charges are borne by the lender or shared.
How will the loan amount be disbursed?
The home loan shall be released in instalments depending on completion of the project and it shall be given in the name of builder only.
If the loan is closed before time, should an extra amount be paid?
The pre-payment costs are loan closure expenses which are to be paid and they vary from bank to bank. These include documentation charges as well. The above are questions which normally arise in the minds of loan applicants, and if the individuals have a meeting with financiers, these can be overcome and the path for loan disbursement shall be laid.