What is a Home loan?
A home also knows as a house loan is an amount of money borrowed by an individual, usually from banks and companies that lend money for buying a home.
About Handle Your Home Loan
When its come to a home loan we often thinks from where we will arrange fund we think for relative families but now we don’t have to ask from them as they are many banks who provide home loans at a good interest rate. Obviously, you have to apply for Home Loans as with the rising inflation, it has become difficult to buy a house from present money. Also, there are many other decisions that you need to make like selecting the property, searching for a home loan scheme, deciding the furniture, etc. The following are some pitfalls that you need to be aware of and avoid.
Before applying for a home look deep in your wallet before zeroing in on the property.
Once you have selected the house that is perfect, you need to consider whether it is affordable to buy that house or not. Buying a house beyond your budget is like having more food than you cannot digest, and thus you end up with indigestion.
Evaluate market conditions
Survey the real estate market and find if the prices of the property are stable and not likely to fall further. Check the Home Loan Interest Rates, see if they are expected to rise or lower in the future. Depending on the present market situation, you may not want to miss out on a good opportunity because you jumped in too early.
Having a number of other loans and high credit card outstanding not only brings down the Eligibility for a large loan amount, but it also adds the burden of repaying all these debts in a limited time
In case, your Equated Monthly Installment for Housing Loan is 10-15 percent of your total income inclusive of other loans, it would be a smart deal. It is also a good deal if the total liabilities range from 10-20 percent, but usually, it is not the case, and you should try to pay your debts sooner.
Increase the down payment
Try to pay a high Down Payment as it will reduce the loan amount which further helps you in paying less in return to buy a house.
When you have applied for a loan, try to pay it before the completion of the loan. Prepaying your loan will lower the term and therefore you can save on interest. However, confirm with your bank as the bank does not allow you to pay the whole loan amount during the first 6 months.
Also, the bank charges some fees to prepay your loan so make sure that Penalty Charges are not more than the interest you need to pay over the years. But it is the best way to close the loan early and save on your loan.
The family bank
It is not necessary to choose the bank from which your brother took his Loan. It is advised to do research on the deals offered by various banks and make a wise decision. This will make you get a better deal from any other bank.
The processing fee
If you nothing in writing from your lender, it is possible that you might lose the Processing Charges that you pay to your lender in case the loan gets rejected. So, you should get in writing from the bank or factor in all this money for these kinds of losses.
The fine print
Read all the documents thoroughly before you sign. Usually, people close their eyes and sign on the dotted line. Check if everything is clear to you and do not hesitate to ask questions.
Instead of ending up in a financial hellhole, it is better to take some time out to read through the loan agreement carefully.