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Top Important Tips for Best Home Loan Experience

Purchasing a home in one’s life is an exciting move. And it is natural for you to lean towards a home loan to fund your home. However, it is usually recommended to find out the Best Home Loan in India available to get the best experience. While factoring in the offered interest rate, capital required, processing charges and other fees are crucial criteria, and there are other aspects also that you must consider.

A clear understanding of all the aspects can help you make a financially informed decision. In case you are planning to avail a home loan, ensure to factor in the following tips to get the best home loan experience –

Tips for the best home loan experience –

By following these tips linked with a home loan, you can enjoy a seamless experience –

Check out your credit score –

One of the crucial aspects that a lender or bank will authenticate is your credit profile. By evaluating your credit score, lenders will gauge your credibility. It is advisable to hold a credit score equaling 750 or more. Holding a strong credit score can even fetch other important benefits like decreased interest rate. If you want to ameliorate your credit score, you can do this by timely repaying your credit card or loan EMI, maintaining a credit utilization ratio (CUR) of at least 30 per cent, and maintaining a balanced mix between secured and unsecured loans etc.

Save your down payment –

Based on your lending institution or bank, the down payment range might vary. Thus, when making your monthly budget, ensure you put aside the required funds as a down payment from your own pocket.

Keep your financial documents handy –

During the application process for your home loan, you will be required to provide a list of crucial documents. Ensure that you have all the documents ready and in place so that your process may be done fast. Ensure that you hold all the mandatory documents like identity proof, bank statement, address proof, pay slips, income tax returns etc.

Compare the offers –

Before you select a home loan, ensure to compare the available offers. Few banks might provide a lesser rate of interest along with other benefits. Compare such offers and choose a home loan deal that matches your requirements the best. And ensure not to go with the very first lender you approach for a home loan that provides you with a low-interest rate. Ensure to compare and negotiate with other feasible home loan offers. For instance, suppose if SBI home loan or SBI Maxgain Home Loan offers you a home loan at an 8 per cent p.a. interest rate, then ensure to compare with other lenders for better rates. If you are unable to do so, ensure to negotiate for a better rate.

Use home loan EMI calculator –

While ensuring that all your home loan application requirements are in the right order for smooth processing, you must also pay attention to the repayment plan. By using a home loan EMI calculator, you can plan out your budget in the best way possible.

Understand the details linked with your rate of interest –

The rate of interest offered for your home loan has an important role in determining your home loan cost. Ensure to discuss with your financial institution regarding your rate of interest, may it be a fixed or floating rate. This can assist you in remaining prepared and calculating your repayments.

Get pre-qualified

By getting your home loan pre-qualified, you simply can speed up your whole application procedure and authentication procedure. To pre-qualify, you must submit your financial info like your savings, income, and investments with your property documents.

Respond to your bank lender

If you are contacted by any bank lender regarding any request or requirements, ensure that you respond instantly. It can assist the lender in keeping your application for a loan active and moving on with the procedure quickly.

Understand distinct loan options

There are various options available when it comes to purchasing a home loan. For example, you can either select a fixed rate of interest or a floating rate of interest. Make sure that you check with the lender about available options.

Make sure to maintain credit habits throughout the procedure

In the middle of the verification process for a home loan, lenders might check-up your credit score. So, it is recommended to continue having excellent financial behaviour even while your home loan is getting processed.

Read the documents carefully.

Before you sign the final loan deal, ensure to read every clause written on the loan document, including the document’s fine prints. It is crucial to understand all the conditions of the home loan if you are looking for a smooth home loan experience.

Understand different kinds of home loan

Based on the lender, there might be different kinds of home loans in the market. For example, SBI home loan provides different kinds of home loans like land purchase loans, home construction loans, balance transfer loans, bridge loans etc. Thus, you must make the correct choice based on your needs and financial requirements.  

Ensure to understand the prepayment and foreclosure norms

It is necessary for you to understand all the prepayment clauses by the lender before you avail a home loan. Doing so will assist you in avoiding any kind of inconvenience later. Currently, the Reserve Bank of India (RBI) banned foreclosure penalties. Avoid rushing to any decision while placing a home loan application. Also, you must check if you meet the PMAY (Pradhan Mantri Awas Yojana) eligibility. In case you do, make sure to make the most out of it while taking up a home loan. Knowing such home loan tricks and tips can assist you in availing a good deal.

Conclusion

While availing of a home loan, it is necessary to understand all the associated aspects. Additionally, ensure that you plan out your repayment schedule beforehand so that you are financially prepared. In case you are not able to avail home loan through public and private sector banks, you can avail home loan through HFCs. HFCs have a lenient approval process.

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