For any Indian, buying a house within a top city is a dream come true—be it Bombay or Pune, Delhi or Hyderabad. These cities are powering economic growth in the country. So, owning a home here is a lucrative prospect. As the city grows, it will bring more job opportunities, better living conditions, and the market value of your home is likely to rise.
For example, say you reside in Pune. The second-largest city in the state of Maharashtra, Pune is growing fast. This city is home to many well-known educational institutions. Plus, it is quickly emerging as a new industrial powerhouse. Therefore, it may be a good idea to look at properties within Pune city. Or, you could even look at the outskirts—areas which are developing fast and where property prices may be more affordable.
Once you’ve found a house you like, it may be time to look for a suitable home loan in Pune. Most lenders will offer attractive home loan interest rates. But you should look beyond the interest applicable when choosing a home loan scheme.
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Tips for Getting the Right Home Loan
Do the Math
Once you take a home loan, you will be committed to repaying the loan over a decade or more. The equated monthly instalment (EMI) due each month can be a substantial amount. You will need to rearrange your household budget accordingly. So, it may be a good idea to start by shortlisting a few loan products that fit the bill.
At this stage, it would help to find a free home loan EMI calculator. Enter in the loan amount, interest rate, and tenor. The calculator will tell you how much you can expect to pay as EMIs for a particular loan. Key in the details for all your shortlisted loan offers. The results will help you figure out which one is the best bet.
See if You are Eligible
Before granting you a loan, the lender will check your credibility. They will check that you are capable of repaying the loan. Various factors will come into play here. For instance, the lender will look into your current income. It will check where you work. A salaried professional may be offered different terms than a self-employed professional like a doctor or someone who runs a business. Your age will also play a role—specifically how long you have been working and how close you are to retirement.
All these factors will help the lender to determine the maximum amount of loan that you are eligible for. Therefore, it would make sense to use a home loan eligibility calculator before you apply for any loan. Once you know how much funds will be available to you, you can shortlist offers in a better way.
Know the Additional Fees and Penalties
Generally, your repayment capacity is based on your monthly surplus income. The higher this surplus amount, the higher will be the loan you are eligible for. That’s because you would then be able to repay a larger amount each month. But you should still calculate the potential EMIs each month. The monthly instalment should not unduly strain your finances. Missing a payment would result in a late fine and maybe even a penalty.
But you should definitely find out what these other charges might amount to. Further issues might arise should you wish to prepay or foreclose the loan. Look for a loan with easy prepayment terms. Later on, should you wish to reduce your debt burden, you would want a home loan that makes this simpler for you.
Once you have zeroed in on the best home loan scheme, it will be time to apply. Gather together the documents required for home loan, fill up the application form, and submit your application. Once loan approval comes in, it will be time to buy and move into your dream home.a