Checklist Before Taking Home Loan

Loan Eligibility : If you are below 40 years just multiply your (and your spouse’s) yearly gross income by four and that should be a rough and ready amount of loan that you should be able to get. If you have some existing loans or some special requirements you can use the facilities of advanced calculators at various websites (www.apnapaisa.com) has one

Arrange your own mony before applying for loan

lenders will mostly fund 80 % of the property value, 20% has to be funded by you from your own sources before loan is disbursed by the lenders.

Choose the Lender : Compare and ask the following  questions

• Reputation of the lender in the market.
•  Experience of other borrower of the lender.
•  Early repayment charges if any.
•  After support services of the lenders.

Choose the Property:

·         Lenders easily finance the property that are ready to move.

•          If the property is very old on which loan is proposed to be taken lenders may not be willing to give the loan.
•          If the property is under self construction state or being developed by the builder who don’t have any goodwill than you may face difficulty in arranging the finance for the property.

·          

Fixed Vs Floating Rate : Fixed interest rates are usually 1-2.5 percentage points higher than the floating rate home loan. All other so called “Fixed Rate” options remain fixed only for a certain number of years say 2-5 years and is reset after that.In case of Floating Rate Loan it is difficult to plan for monthly payments,

Tenure of Loan :- If you opt for a long tenure loan then you will be paying more overall as the interest paid would be very high.

Fees and Charges : Bank will add administrative, Valuation charges,  service charges or processing fees and other hidden cost. It is deducted upfront  from the sanctioned loan amount.

Insurance of the Property and Borrower :

Mostly lenders want the insurance of the property and borrower from the  associate company of the lender. Therefore increasing your cost . Negotiate on this point before availing the loan and compare the charges you would have paid if you had taken the insurance from some other company.

Educate Yourself : It is better to educate yourself about the terms and conditions of each loan agreement so that you are prepared beforehand These days loans are made attractive for the buyers with lower interest rates and scheme.

•          Read the Agreement Carefully.
•          Negotiate on the Interest Rate
•          Don’t Look only the EMI, Look the total amount of loan and period of loan .
•          Take the legal advice like on NOC etc