It is a dream come true for the average Indian, when they have a home to call their own. However, it takes time to research and find the right house for you, and to plan your finances to purchase one. Houses and real-estate are expensive, and you may need to take a loan to make the purchase. A home loan is a wise idea, but you need to keep a lot of factors in mind before you apply for one. These include:
1. Eligibility
Check your total eligibility, before applying for a home loan. You can use an online eligibility calculator to do so. This will tell you how much of a loan amount you are eligible for, based on your income, credit score and certain other factors. The higher your income and credit score, the higher the loan amount you will be eligible for. Lenders also conduct a background check with your employer to confirm if you have provided accurate information. Your credit history and payments are also analysed to confirm your repayment ability.
2. Interest rates
Figure out how much you are willing to spend on your dream house. It is vital to set a budget for yourself and estimate how much you can afford to pay as interest. The interest rates on home loans tend to be high and paying for it must not affect the rest of your due payments. Be aware of the costs involved and make calculations accordingly to ensure this. Additionally, research and compare interest rates and tenors, before you select your lender.
3. Your credit score
Your credit score plays an important role in qualifying for a loan. It is a measure of your credit worthiness and having a good credit score is necessary to qualify. The ideal score to avail home loans would be 685 or higher.
4. Processing fees
Apart from EMIs, lenders may also charge 0.5-1% of the loan amount as a processing fee. Certain lending institutions engage third party firms to scrutinize the documents submitted along with the loan application. This expense is usually included in the processing fee, though it may not apply to every case. Certain lenders may even waive off the processing fee.
5. Documents needed
To avail home loans you generally need to submit a few documents along with the loan application, including your identify proof, latest salary slips (authenticated by your employer), proof of residence, income tax return forms, last six months bank statements, passport-sized photographs, etc. Have them ready before you decide to apply.
With Bajaj Finserv’s pre-approved offers though, the process of availing home loans becomes quite easy. Share a few details and get your pre-approved offer.
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