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Tata Capital > Blog > Loan for Home > Research You Need To Do Before Availing A Home Loan

Loan for Home

Research You Need To Do Before Availing A Home Loan

Research You Need To Do Before Availing A Home Loan

Buying and owning a home involves considerable financial planning and commitment. With increasing property rates and growth in economy, ownership of a house by an average middle-class individual seems difficult. This is when financial services companies such as Tata Capital come to rescue to assist with hassle-free housing loan. However, to speed up the loan process, it’s important for you to understand precise information that would be required from you.

  • It is important that you do an in-depth research and understand the various terms associated with affordable home loan amount, down payment details, procedural guidelines, documentation, applicable interest rates, types of interest rate (fixed or floating), EMIs, tenure of loan, and much more. This would help bring transparency and flexibility during the process for you. Ensure that you get all the details as these are necessary for you to make a right decision in terms of your budget and planning for the new house.
  • It is advisable for the applicant to gain understanding about various types of home loans available such as Loan for a Plot, Home Construction Loan, Home Renovation Loans and others. This would help the applicant take structured and informed decisions with regards to the same.
  • The applicant should also be certain about his home loan affordability and EMI eligibility. These are calculated by the Home Loan Affordability Calculator and the Home Loan EMI calculator respectively. You can find these on the websites of banks and financial services providers including Tata Capital. This allows you to apply for home loans that fit appropriately in your budget.

    Additional Read: Tips and Tricks on How to Reduce Home Loan EMI
  • It is important for the applicant to have a good credit history which depicts that he/she has paid all his bills on time. Late payments negatively affect your credit score which might not help you in the long run for availing housing loans.
  • The applicant should also showcase a stable employment/professional work history while applying for home loans. This would ensure the lender about your capability to repay the loan on time.
  • The most critical research is in terms of understanding how to secure lower home loan interest rates. This becomes possible when the credit card balances of the applicant are considerably low and when all bills are timely paid. This depicts that the borrower is a responsible individual and that better deals could be negotiated.
  • The potential lenders tend to monitor your expenditure – this is also termed as credit analysis. This makes them decide on whether they should sanction or decline a loan application. Therefore, it is important for the applicant to keep a check on his expenses while the home loan application is in process. The home loans might get declined in case of applicants depicting luxurious lifestyle with high expenses / big purchases.
  • The applicant should discuss with the financial institution whether it can guarantee that the housing loan will close on time, so that further issues and costs do not crop up.
  • Many more details with regards to premium on insurance, factors leading to delay in closure of home loan settlement, overdraft facilities, hidden costs, modes of repayment, etc. need to be understood well by the applicant. A better understanding of these parameters would help in the journey of home loan application.
  • Different lenders have different interest rates, tenure period, down payment options, processing fees, involved penalties, etc - applicable for home loans. Thus, by having the details of various deals provided by banks, mortgage companies and credit unions, NBFCs (on the basis of above discussed parameters), the best decision-making could be done.
  • A potential lender would seek relevant documents and paperwork needed for the home loan application process. Therefore, it is important for the applicant to organize bank statements, tax returns, credit card details, payslips and other documents. Making a checklist for the same could also prove to be beneficial, so as to have everything in order.

    Additional Read: Buying a House? Make Sure to Follow this Home Buying Guide!

So, while buying a home is an exciting time, applying for an appropriate home loan option becomes very important. Review the above factors so that you achieve better clarification on the home loan process. Whether you are looking for your first home or expansion of existing home, NBFCs like Tata Capital offers flexible home loans that suits your needs. Know more about Housing Finance, and kick off the process to unlock the doors to your new home.