Important Things You Need To Know Before Taking A Home Loan

By Author: Inr Credit
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These are important considerations to ensure you don’t miss out on the opportunity to purchase your dream home even if you cannot pay all the money upfront. Taking a home or property loan for mcd, for instance, is a cumbersome process and many factors are associated with a loan that you may need to be aware of before opting for one. Here are some most important ones:

Factors affecting your eligibility criteria:

The best way to calculate your eligibility for home loan is by calculating your EMI. Often banks limit your EMI amount to 50% income of borrower. Credit history is another important consideration for the same. So, if you have a poor credit score or an existing loan, your loan eligibility may decrease or you may have to take loan on higher rate of interest. Having a co-applicant also increases your eligibility. Now it is very easy to check home loan eligibility online by using loan eligibility calculators.

Understand your loan type:

Banks offer two types of interest rate on loans- the fixed and floating. In the fixed rate, as the name implies, the interest remains the same and borrower ...
... pays a fixed EMI throughout the tenure of loan. On the contrary, if you get a floating interest rate, the rate varies as per the fluctuating conditions of market and hence the EMI amount keeps varying.

The interest rate

No matter the type of loan you go for, it is important to negotiate to get the best possible rate of interest. While the banks surely have an edge, if you have been a loyal customer of the bank or have a savings account there, you do get some advantage. The negotiations can be a lot easier if you have a good credit history.

The interest rate is also reduced in case of loan against property, you can check your maximum loan eligibility in lap and proceed further.

The fine print:

Agreement of home loan is an important legal document pertaining all loan details. It is hence advised to read the fine print to understand the clauses before you sign the document. Also be careful about penalty charges, hidden clauses, processing fee etc.

These are some things that you must keep in mind when applying for a loan.

Source: http://www.article.org.in/article.php?id=134945