Want to buy a home? Then for sure, you might be one of those who are looking out for Home Loans. Even though, Home Loans seems to be quite easy but involves very tricky steps, so you must be fully prepared in advance. Here are certain things that you must know before looking out for the home loan.
Home Loan Types
Before starting anything, you must know the types of Home loans at first. Usually, there are three types of home loans provided by banks. Even, you can also find these types of loans at any financial institution that offers loans. These loans are explained below:
Fixed-Rate Loan: In this type of home loan, the interest rate of the home loan that you take is going to remain the same for its complete period.
Floating Rate Loan: In this type of home loan, the interest rate of the home loan you take varies as per the already set benchmarks of the lenders, which typically varies each year or every other year.
Property or Home Loan: What you want first?
First-time home-buyers mostly get into this confusion whether they want to buy a home loan or the property first. However, to make it simple, you must get the home loan first as this will help you to set your budget for your home and you will lookout for the same accordingly and you will not overpay for it.
Eligibility Criteria For Getting The Home Loan
It is very necessary to check your eligibility before even applying for a home loan. For this, you must know your CIBIL score which one can also check by contacting their bank in order to know whether if you are eligible for a home loan or not and what is the amount that you can get under it.
You must have heard about the CIBIL score if not, it is a credit score that tells a person’s solvency with the help of several parameters in the form of a 3-digit number. Your monthly income, prior loans, and other expenses also take an important role in getting eligibility for a home loan.
EMIs and Tenure
Home loan tenure is considered by the type of loan that you have taken, and the lender, along with the repayment amount. EMIs are the installments that you pay on a monthly basis to your lender against the home loan, which consists of repayment of the principal amount as well as the interest of the residual total amount. For having lesser EMIs, you have to then opt for longer tenure loans.
Check The Cost Of Your Home Loan
Whenever applying for the home loan you must check out its cost at first. A typical cost of a home loan consists of interest payments, processing fees, penalties, along with administrative charges. Other charges vary as per the type of loan that you have selected. You can get all such details on the official websites of the lender, you must read all the documents carefully and should also ask them the questions to know if there are any hidden charges or not.
Insurance Cover is Must
Insurance for your home loan is very important as it is going to cover your family against any outstanding loan payment for the duration of any unfortunate times. At that time, you may want to take home loan insurance cover for saving your family from bigger liabilities of the future. There are also some lenders, who also provide this facility as well.