Having a home is one of the biggest financial decisions you and your family can ever make. For many homeowners for the first time, using a home loan is the only way to fulfil their homeowner aspirations.
Here are 10 things you need to know before applying for a home loan:
Eligibility criteria:
The first step you need to take is to determine if you are eligible for an Axis Bank home loan. Initially, lenders will assess your eligibility for a home loan based on your income and repayment ability. Other important considerations include age, degree, financial position, amount of dependents, partner income, and job stability.
TYPES OF HOME LOANS
Flexible / Frozen rate loans:
In this type of loan, the interest rate is linked to the lender's interest rate. If there is a change in the rate of interest, the interest rate also changes equally.
Fixed-Rate Loan
For fixed-term loans, the interest rate is suspended at the time of the loan. This interest rate applies to the entire loan period.
Consolidation of loans:
These loans offer part of the loan at a fixed interest rate and part of it at a fixed or floating interest rate.
FIRST HOME OR FIRST LOAN
It is best to have your home loan approved before choosing your home. Pre-approval helps you adjust your budget directly and make your home search more focused. Pre-approval also helps to negotiate better deals and closures.
LOAN MONEY
As explained by the regulator, most lenders offer home loans ranging from 75 to 90 per cent of the cost of the property depending on the value of your loan. Therefore, if the property has a value of Rs 50 lakh by the lender, you can get a higher loan of Rs 40 lakh.
THE COST OF YOUR HOME LOAN
The cost of your home loan is also a factor to consider when assessing its suitability. Expenses will include interest payments, Home Loan Processing Fee, administration costs, prepayment fees, etc.
EMI / PRE-EMI
EMI stands for Estimated Month Installation. It includes the payment of capital and interest on the outstanding amount of the loan.
Pre-EMI is a concept used in architecture. In this case, you get your loan in instalments depending on the instalment you need to pay the engineer.
TIME
Home loans can be allowed for a maximum of 30 years, depending on the eligibility of the customer. Longevity helps to reduce the burden of EMI.
DOCUMENTATION
Required home loan documents can be divided into:
KYC documents:
This includes your identity and address proof. Other documents you can submit with this requirement include a valid passport, voter ID card, Aadhaar card, etc.
Credit Documents:
These documents help the lender to assess your creditworthiness. If you are employed, you can submit your salary slip in the last 3 months; if you are self-employed, you can submit income tax returns and income calculations for the past 3 years.
Property Documents:
These documents include the contract of sale, deeds, etc. The lender makes good use of the property following these documents. To see the full list of documents required for your home loan.
Your paperwork is important. As your original documents such as title deed, sales agreement, receipts for your donation, etc. Another important factor to consider is the easy availability of texts.
INSURANCE COVER
You must purchase a loan coverage period plan that will include the loan amount. It is important to do your research to find the best home loan insurance available. This will free your family from the unpaid loan obligation as the loan is repaid by the insurance company in case of misfortune.
DEFAULT
It is best to keep paying your EMIs regularly. If a customer misses more than 3 instalments, lenders have the power to take legal action against the courts without the intervention of the courts according to the SRFAESA.
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