A home loan has become one of those necessary liabilities that you must plan for. A home loan process is quite simple if you opt for the right financial institution. The best financiers get you through the entire loan sanction process with only the essential paperwork. They also tend to give your savings a priority so that you can afford the home of your dreams without the grind of financial stress. The best advice one could give you at this point is to go through the home loan eligibility and judge your financial status. If you think you are eligible for a home loan, go ahead and read our tips on how to crack the best home loan deal available in the market.
Tips You Can Swear By
These are the five points that you should carefully read through before you decide on the best scheme.
- Maintain a Good Credit Score: If you are contemplating a housing loan, start early. Building a good credit score is essential to increasing the chances of getting a loan approved. The best way to have a healthy credit score is to repay your dues every month on time. However, do not worry if you do not have a loan history. You can always use collateral, such as a security deposit or an existing property to get a loan. Always choose a financier who offers flexible loan provisions, so that there is always a scope for negotiation.
- Two is Better than One: If you think that the credit amount is not enough to cover the entire cost, go for a joint loan. Not only will you get a higher loan amount, but the bank will also be interested in this deal. This is because more than one party is involved, and shared liability reduces risk. Furthermore, if the joint loan co-applicant is your wife, it makes the deal even sweeter. Women are eligible for interest concession of up to 50 basis points (0.5%), which will further reduce the monthly payment amount.
- Selecting the Right Financier: When we say, “select the right financier”, what we mean is select the lowest interest rate possible. You cannot imagine the amount of money you will save if you opt for the best interest rate available in the market, which is 6.65% at the moment. Even a small concession, say 5 or 10 basis points (.0.5 – 0.10%) can add up to a lot of savings. The best way to go about the process is to opt for new construction that is already financed by the banking sector. The major advantage of this strategy is that financial institutions already have knowledge of the property valuation, so paperwork will move smoothly. Figuring out the right interest rate also becomes easier for the same reason. You should also take interest in the market valuation of the property so that you can negotiate the interest rate with the financier on proper grounds.
- Save Money: Although this is a basic strategy, you can count on it. The more you save, the greater will be your ability to make a substantial down payment. Thus, with a chuck of the payment done at the very beginning, your outstanding amount can be paid off in less time. Reducing the loan repayment period will also mean that you will pay less in interest. You can further pay less by a process known as prepayment. You can simply pay more than the due amount every month so that the balance statement can be closed at a much earlier date.
- Go Through the Terms and Conditions: One thing that you should never do is glossing through the terms and conditions pages. As a debtor, you must be aware of every penny you are paying. Even if it is painstaking, take your time to read the rates of interest imposed, and the late fines imposed on outstanding amounts. If you have opted for a balance transfer, you should focus all the more on the terms and conditions page. It may so happen that your financier might change the interest rate after the introductory period is over. If that is the case, find out the projected interest rates. If it is not mentioned in the terms and conditions, simply enquire with the financier. Using a housing loan EMI calculator, make sure you have a concrete idea of the savings you are going to make over the repayment tenure. Go for the balance transfer option on your home loan only if you think that the savings would be substantial.
Wrapping It Up
You can ensure that the application process is smooth and hassle-free, by applying for a home loan from leading financiers, such as Bajaj Finserv. The best way to ensure this is to check all the boxes in the ‘required documents’ list. Keep ample passport-sized photographs ready, as you will surely need these. While you focus on your home loan, make sure you do not make unnecessary purchases to increase your financial liability. Repaying your debt is the priority that you should commit yourself to. Focus on saving more corpus, so that money can be diverted towards repaying the loan faster, and you incur a lower interest amount.
