Important Aspects of Home Loan
Purchasing a house is a vital decision in terms of finance for every person as it could also be regarded as the biggest investment of a lifetime.
In every corner of this world, home loans or mortgage loans have made it convenient to own a house within a limited income. This liability needs to be furnished, and there are some things to remember while acquiring a home loan.
• Influence on personal finance: Before taking a home loan, it is recommended to analyze the impact of the loan and the terms of repayment. It is a form of prescribed personal finance to obtain a fresh monthly budget where new cash outflow can be accommodated. Briefly, the ability to repay the home loan in the form of installments should also be determined.
• Perceive maximum loan eligibility: According to the terms of current market, 60 times the monthly salary of an individual can be borrowed from a bank. The amount of salary received is expected to repay the loan installments keeping aside all the allowances. Thus, the eligibility must be realized while taking this loan.
• Know your CIBIL score: The worthiness of credit really matters for taking a home loan. The previous credits must also be managed in case of pending loans, check bounces and uninsured earlier loans. Credit Information Bureau India Ltd (CIBIL) has a fixed scale for applying for a loan or a credit card.
• Tenure: It is important to know the affordability of installments every month. The lower duration of repayment is preferable. It results in a higher amount installments, but at the same time it lowers the interest rates over the term. The longer duration must be chosen only if the individual is facing difficulty in paying higher EMIs.
• Transferring loans: It is a good decision to switch the existing loan to another bank which offers a lower interest rate than former, but the closing charges of the previous loan must be kept in mind along with the processing fees of a new bank. These costs and interest rates need to be considered.
• Delayed payments: The missed or late payments can affect the financial aspect of the credit history. It could lead to the payment of penalties for the delayed installment and would be reflected on the credit history. It creates hindrance in transferring loans to other banks which results in difficulty of taking a loan in the future.
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