Owning a home in today's time has become a necessity. It is not only a symbol of one's reputation; indeed, it is also a means to ensure financial security. However, for some people, it's not just owning a house that matters; instead, what matters for them is owning their dream home. The idea of a 'dream home' is usually considered a larger than life phenomenon due to high home loan interest rates. This is because a good property consists of all that is required, in terms of space-the bigger the house, the better it is, in terms of location- good location marks a good circle, in terms of architecture and also in terms of interior decoration and furnishing.
Finding and then owning a dream home is truly a big task for people since the dream home with everything listed above usually costs people more than they could afford. In such a situation, a home loan is the rescue point, that helps bridge the gap between your' dream home' and 'real house.' However, it is not always necessary that a home loan would make things easy at once; what matters more is opting for a home loan that falls in the borrower's budget. But how? How to avail of a home loan that won't dig a hole in your pocket? How to avail a loan that won't make your EMI's feel like a liability instead of an investment in your dreams? The answer lies below.
1) Research and Compare: Before opting for a home loan, the best thing one can do is to research all details about the home loan, as in, what it is, and how it operates. Further, knowing and understanding the EMI structure and mechanism could benefit the borrower to plan his or her loan and the expenses related to it. Complete knowledge about the loan could help the borrower crack a good deal with the lender.
Apart from that, a borrower should also research well about the different interest rates and charges that vary across lenders. For instance, while some banks charge processing fees on the loan amount, some banks even charge a NIL processing fee. Complete knowledge of all aspects of the home loan will help in choosing the best loan option that is affordable and convenient for the borrower. Therefore, the first requirement to avail of a home loan that fits your budget is to research well and compare the interest and other charges and then opt for one that is affordable.
Bring in a Co-applicant: Adding a co-applicant is an advisable thing to do, to opt for a budget-friendly loan. Joint home loans not only improve the eligibility of the borrower but also help the borrower to manage expenses as all applicants share the burden imposed by frequent EMIs and other charges. Further, a joint loan helps applicants avail of loans along with higher tax benefits, thus more savings. Many lenders provide loans at lower interest rates to women customers than the general rates. Thus, if the co-applicant is a woman with a regular source of income, for instance, the borrower's mother or wife, then home loans can be availed at a comparatively lower interest rate. Therefore, bringing in a co-applicant can be helpful if you wish to opt for a home loan in your budget.
Explore loan from your salaried bank, but keep all options open: If you are a salaried individual, then opting for a loan from your salaried bank can be beneficial. The salaried bank often lends loans on easier terms to their regular customers, or to the previous account holders. This is because the bank is already aware of the creditworthiness of the borrower. Thus, the loan is pre-approved in away. Also, the borrower can easily negotiate the interest rate and other charges with the bank, as it is less likely that the bank will let you opt for a loan from another bank over small negotiations. Apart, opting for a loan with a bank that holds your salaried account will allow the bank to cut EMI charges directly from your salary. This can help you save time and energy as you do not need to invest a lot in formalities for paying off EMI. Further, a direct cut from the salary will help you manage your expenses in a more organized way.
While opting for a loan from the regular bank could be more pocket-friendly, as there are chances of negotiations and easier management of funds is possible, yet connecting to other banks is important. It is equally important to explore and to keep other options open. For this, the borrower should be aware of all expenses like EMI which can be calculated through Home Loan Calculator. At times, the salaried bank may offer more interest rates on loans than other banks due to the banks' own terms and policies. In such a case, exploring and researching becomes important.
Select a property with a clear title and complete set of documents: It is important to ensure the legalities associated with the property. Before opting for a loan for any particular property, the lender should ensure the authenticity of it. At times, unknowingly, people tend to buy properties that are in conflict due to ownership issues or are located in a conflicted location that is likely to be seized by the authorities. In such a case, investing in a home that may later turn out a loss, is not advisable. Instead of investments, such a home could become a liability. Therefore, the borrower should select a property that has clear records in terms of ownership, is located at a legal location, and is registered.
Borrowers can ensure the authenticity associated with a property by checking all the documents and getting them verified. It becomes important to collect the necessary documents such as Sale Deed, NOC Certificate, Power of attorney, and completion certificate, among others. Therefore, to ensure that buying a home through home loan becomes an investment instead of a liability, verification of the house is important. Not ensuring the same might impose a further burden on your home loan budget.
On a concluding note, borrowers should research well about the pre-requisites and post-responsibility associated with a home loan. Complete knowledge of the loan would help you crack a good deal with the lender. Though 'loan in budget' is often considered an unrealistic factor by many people, yet if the borrower behaves wise and follows the above mentioned, he can expect a home loan that fits the budget.
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