Aspects to consider when applying for a home loan

Applying for a home loan is the most common activity we see individuals do when planning to invest in real estate or building their dream house. There are several providers in the market that claim to give the best home loan to the consumers. No doubt the variety present in the market today meets the need of every individual seeking home loan in India. However, getting the most suitable loan only should not be your criteria. You must also consider the fact that the loan needs to be paid back without creating a financial crunch in your peaceful life. Hence before you apply for a loan, be sure of your income and understand how much loan you can afford. Here are some aspects that you should consider when deciding your need for a home loan .

The amount of loan you can afford –
Before you avail the loan amount determine your budget for the property. A home loan does not fund the entire expense of buying a property. You will be expected to pay around 20% of the property cost to the builders when booking the property. The rest of the 80% can be managed by the home loan you avail. The costlier the property you buy the more will be the down payment and loan you need to avail.

Constant Income –
The best home loan is one that charges you reasonable EMI and gives you the flexibility to repay it. But repayment of the loan needs you to have a steady income. Hence before you apply for a home loan, be sure there is no risk of losing or leaving your job, in such a case repaying the loan will cause you a financial crunch. Also make sure your salary can support the EMI payments. While doing consider your daily expenses, emergencies and other expenses in future. It is wise to only apply for a loan amount your salary can afford to pay off.

Credit history –
Credit history is basically a report that accounts everything related to how an individual managed his credit. The report holds all the information related to borrowing and repayment of credit cards, bank loans, car loans, mortgages and any other debt owed to a creditor. The report also provides information on your Lenders like banks, credit card companies etc. This information helps the home loan lender decide your eligibility for a loan. So a good credit history will help you get a higher home loan in India.

Types of home loan –
There are number of providers and schemes for the best home loan in the market. But it is important you choose a home loan option that suits you the most. The loan rate may vary as per the end use of the amount. Hence it is important you apply for the right kind of loan.

Home loan can be the easiest way to buy or build you dream home. But it is important you consider the repayment of the loan before applying for one. Hence it is advisable to check your capabilities of repayment along with the features the loan provides.