Getting a home loan is akin to taking a roller coaster ride; full of dips and curves. Navigating this roller coaster ride and coming out successful requires careful planning and consideration cause making even a small mistake could cost you your home loan. So, here are five tips on how to avoid mistakes while taking a home loan.
Find the property before you find the lender
It’s always a good idea to finalize your property before you apply for a Bajaj Finserv home loan. Most banks will provide a loan far more quickly if the property in question is ready-to-move-in, or an under-construction, or falls under the banner of a renowned builder. But if the builder is not well-known or the property is still under-construction, you might face some difficulty in getting a loan. Generally, though, if you are under 40 years with minimum liabilities and a good income, you can get approval for a home loan.
You still need to have the down payment
Though the bank is funding most of your property cost, the home loan down payment still needs to be paid by you. And banks will check whether you have enough funds to make said payment. If you are borrowing this amount from family/friends, you still need to give the details of how much you will be borrowing. Ultimately, you still need to pay about 10-12% of the property cost from your pocket.
How much loan are you eligible for?
When it comes to avoiding mistakes while getting a home loan, overestimating the eligibility amount is a common one. Banks calculate the eligibility amount in various ways. Visit a few different financial institutions to ascertain where you can get the maximum loan amount. Combining yours and your spouse’s income can usually get you a home loan, but if you’re still not eligible, you can ask the lender company if you can club the income of other family members to get the loan. Many financial institutions have the option of clubbing your sibling’s income along with yours to make you eligible for the loan.
Processing fee is just a downside of home loan
For banks to consider your application, you need to pay a processing fee, which is around 0.5-1% of the loan amount. Paying this fee doesn’t guarantee you a loan, it is a non-refundable fee that only gets the bank to take a look at your application. You can’t ask for your processing fee back even if your loan is declined or you get a lower loan than what you applied for.
Fixed or floating?
You have the option of choosing a fixed or floating interest rate for the home loan availed. When talking of floating rate of interest, it means the rate of interest will change when the RBI changes its mandates. On the other hand, a fixed interest rate is one where the interest rate remains constant even in the face of market fluctuations. But, fixed interest won’t necessarily remain fixed; the bank can change its interest policy any time. So, if you’re taking the loan for a small duration, say for 6-8 years, a fixed rate of interest may be the smart choice. And if your loan is for the longer term, then opt for a floating rate of interest. Go for a bank that offers a base rate if you’re opting for floating rate to know if the bank passes the benefit of moving interest rates to you or not.
As long as you choose the right property, the right builder, and have all your documents and finance in order, getting a home loan will not be an annoying task at all. The above tips on how to avoid mistakes on home loan can also help make this process hassle-free and organized.
Now that you know everything about the Do’s and Don’ts of availing a home loan, why wait? Get a Bajaj Finserv Home Loan online with Finserv MARKETS, today! What’s more? The entire process is easy, quick and you can enjoy a host of other features and benefits that help you get the best out of your investment.
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