Tips For Applying For a Home Loan

Taking a home is one of the biggest investment which requires a lot of thought and funds in this time span where prices of the property are reaching the skies. Applying for a home loan has it’s own benefits – reduction of taxes etc. But choosing the right kind of loan is also of prime importance. To avoid the latter surprises, it’s better to bear a few pointers in mind.

1. Good Research:
Do not believe your agent with a blind eye and a deaf ear. Do your own research of the best deals and terms available in the market. Research just helps you with better options. Some banks allow different facilities, choose the one beneficial for you.

2. Down Payment: 

Every borrower has to pay some amount of money from his own pocket. The bigger the amount, the lower the interest rate will be. Make sure of the amount you will be giving as down payment to increase the bridge funding and the difference in the interest rate.

3. Spend Cautiously: 

Keep a watch during your home loan span. Benjamin Franklin said it right- “A penny saved, is a penny earned.” and fits perfectly in case of home loans. You can actually use your savings to foreclose your loan.

4. Floating or Fixed?: 

Floating interest rate is connected to the market which moves as per the market rate. Fixed interest rate remains fixed for a mew months as mentioned in the loan agreement. Learn the benefits of the two while applying for a loan.

5. CIBIL Score: 

This is a score that reflects your credit rating. Make sure you maintain a CIBIL score of 750 plus to get your loan approved without hassles. CIBIL data indicates that 80% of the banks approve home loans only if your score is 750 plus or else your application might get rejected or with a higher interest rate.

6. Stay Up To Date: 

There are constant changes in the interest rate or home loan terms from the RBI. Keep yourself updated before you end up regretting later.

7. Compare Deals: 

Whether a fresh loan or a balance transfer, compare deals from the competitors, and then sign the agreement if it convinces you.

8. Read the Documents: 

You might be bombarded with all types of documents but it is essentials you read all the terms carefully before you sign the documents. Take your time, ask as many queries till it’s not crystal clear. It is important that you know your deal extremely well.