What Are The Factors To Consider While Applying For Housing Loan?
Home loans can be of immense help when you need access to a huge sum to buy your own abode. There are many banks and financial institutes that provide home loans in India with attractive interest rates and flexible loan tenure. You can visit online or in-person to apply for a loan. However, in this technology-driven world, most of the millennial prefer applying for home loans online.
It is necessary to take a cautious call on which loan provider is certified, and gives a profitable deal. After all, handling finance for a span of around 20–25 years is no joke, and it’s necessary for people to make a well-informed decision. There are a lot of factors that will tend to scare away people.
Here are a few things that will help you make the right decision:
How much home loan you’re eligible for?
To be eligible for home loans, there are certain parameters of different lenders that you will have to meet. The home loan eligibility is based on factors such as income, job or business stability, financial commitments, number of dependents, existing asset and liabilities, bank savings and credit history, etc. Lenders will even decide your home loan interest rates based on the eligibility factors.
What document do I need to produce?
For Age, Identity and Address proof copy of documents like: Voter’s ID Card, PAN card, Aadhaar card, Valid passport or a Driving license For income proof: If salaried — Salary Slips/ last 6 months bank statements/ Form-16, A certified letter from Employer, Any Increment or Promotion letter, and IT returns for 3 years and for Self-Employed — IT Returns and Financial Statements of last 3 years, Audited Balance Sheet and other documents such as application form with photograph duly signed, copy of Allotment letter/Seller’s Agreement and Receipt of payment made to builder/developer.
What happens once I receive the loan sanction letter?
Once the lender sanctions your loan and issues a letter, you’ll have to furnish all the official property papers to the bank. A legal team will evaluate the project and its authentication. The document will be kept with the lenders till the loan is repaid back.
Will I be able to negotiate with the lenders?
Yes! You can negotiate with the lenders. In fact, even a 0.25 % to 0.5% will help you save thousands and lakhs in the long run. A good credit score and steady income source can play a key role in negotiating with the lenders for attractive home loan interest rates. If you hold an account with the bank, it will be an added advantage because you will save on money transfer towards loan repayment. Your bank statement will speak for you.
Will I get tax benefits?
Yes, you can avail tax benefits for principal amount repayment up to Rs 1 lakh under section 80C, and on interest rate up to Rs 1.5 lakh under section 24. If you’re a first time home buyer you can avail an additional Rs 50,000 under section 80EE on the interest paid towards your home loan.
What will be my monthly installment?
Many times when you manually sit to do calculations, it’s a tedious task and doesn’t guarantee a solution. But online calculators give accurate solution and let you try different options so that you pick an affordable EMI option
Hope you’re now clear with few things that will help you easily apply for home loans in India.
