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Golden Rules To Remember Before Applying For A Home Loan
Buying a house is one of the most important milestones in a person’s life. However there are numerous facets which have to be considered before proceeding with the purchase of a new house. Most people avail home loans for the purchase of their new house. But before approaching a bank for a home loan there are numerous things which must be kept in mind. The property market is not without its own shades of darkness, therefore a person about to enter this world, should be aware of its numerous avenues and nuances.
The first step towards the discovery of this whole new world of home loans would be to learn the lingo of the property world. Every professional sphere has its own language of communication, individualistic and unique in its self- its very own lingo. Those who are unable to grasp the lingo of the property world and the world of home loan indiaare ones most likely to get cheated of their dues and benefits. One must be aware of the ‘fixed rates’, ‘market rates’, ‘adjustable rates’ and ‘mortgages’. These are a few of the property jargon. One must be able to comprehend how the interest rate on the mortgage would affect the monthly payment.
Another important factor to consider before applying for a home loan would be to deliberate on the amount of money that he/she would be able on spend for the purchase of their new house. Determination of the purchasing power is very important thing to consider before applying for a home loan. A mortgage calculator can be used to figure the purchasing power along with the taxes and insurances, which would be incurred. Also it is noteworthy to mention that making a higher down payment would reduce the mortgage amount considerably.
Before applying for a home loan it is best not to open or close accounts. Applying for new credit cards or any other form of credit accounts could affect the loan about to be undertaken for the purpose of purchasing the new house. It is equally important not to close any of the existing accounts, as an active account, even one with null balance shows the credit history. A longer credit history, especially those, which have a good payment record, are better as they portray a positive review.
Have a steady job. Having an unsteady job, or quitting your job before sending an application for a home loan will have a negative impact on the loaners. A history of stable employment is pertinent for the approval of a home loan, at least be employed at the same job for 2 years or stick to your job for the duration of your mortgage. Having a steady job will also enable you to pay all of your bills on time. Moreover, remember while paying off mortgage, a late payment will incur a higher rate of interest.
Also make sure that you have chosen the best mortgage company which is apt for you.