Planning to Apply for Home Loan, Have a Look Here
Monday, August 8, 2016, 6:00 AM | Leave Comment
Are you planning to get moved into your permanent address? Then the first point strike to mind is the home loan.
It is the most important source of finance for buying a home. Home loan provides a financial support to the buyer as well as saves on taxes also.
Real-estate financing is a hefty job that includes lots of paperwork and time consuming also.
So, here are a few quick tips which can quickly simplify the tricky loan process, and at the same time saves time also.
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Calculate the Required Loan Amount and do Research
First step towards the process is deciding the loan amount. How much money you can raise by your own by the savings or liquidating your assets?
With the arrival of a number of banks, these day loan processes are made quite attractive with low interest rates and other perks.
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Know Your Loan Type
Generally, there are two basic types of loans based upon the interest rates-fixed and floating. As the name suggests, in fixed loan, there is no variation in interest amount due to market fluctuations, whereas with a floating interest loan, the price varies according to the market conditions.
Though a fixed interest rate seems to be handy but this could lead to loss when the interest rates bound to come down.
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Know Your Eligibility Criteria
A gross way to calculate the loan eligibility is by calculating the EMI’s. Usually, bank limits the instalments at 40-50% of the salary, which does not include the reimbursement and allowance amounts.
Apart from that banks also keep a strict eye on source of income and stability. Banks try to limit the loan tenures and makes sure that it should not go beyond the retirement of the buyer.
Check at the below parameters before arriving for loan:
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Current Salary
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Income tax for next 20 years
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Projected overhead expenses for next 20 years
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Sources of income
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Sources of income tax
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Ability to sustain the EMI amount
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Check the Documents
Now, once the process is initiated, double check all the documents. It includes 3 month salary slip, ID proofs, IT Return forms, Address proof, NOC, Sale agreement. Keep all the documents ready in one place and get it photocopied too.
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Do not forget the Bank’s Processing Charges
Nothing comes free; remember the quote while you are filing for the process. Though it seems to be a cost free service, but banks do have loan processing charges too, which has to be taken care by the borrower.
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Bargain on Interest Rates
There is a myth that banks and financial institutions follow fixed interest rates and they are non-negotiable. But this is not true, try to make slight adjustments with the honest issues regarding the high interest rates. But this is a final stage step, try it only when the property is decided and you want to get it done as soon as possible.
Apart from that before making final verdicts, take second opinion, talk to risk consultants and financial advises too. Also, it is recommended to go for longer loan tenures which make the borrower eligible for higher loan amount.
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