Top Things You Must Consider Before Opting for a Home Loan

A home loan, whether through private sector banks like Kotak Home loan, Yes Bank home loan, ICICI Bank or IndusInd Bank or public sector banks like State Bank of India, Bank of India, Indian Bank, etc., is an important decision. In case you are one of those looking to purchase your own house or plot or land, or if you are looking for ways to make an investment in a plot or property and get some cash coming in through it, then you must read this article. Here in this article, you will learn about the important things you must factor in before placing an application for a home loan. 

What is the ideal time to begin the process of applying for a home loan?

The ideal time to begin with your home loan processing is when you are financially fit and know you will be able to meet your regular home loan EMI with ease through your income. Thus, before you decide on applying for a home loan, you must ensure to know certain things like your eligibility for a home loan, the expected home loan EMI you can meet, the time it may take for the loan to be processed, etc. Ideally, the correct time is once you are prepared with your down payment for the home loan. Making your down payment for a home loan will allow you to go ahead with your home loan application successfully. 

The mistake or error that few of you make here when applying for the home loan is that you may wait to zero on a specific deal for a home, plot, or apartment and just after providing the down payment amount or the token payment for the plot or property, you can begin with your process for a home loan. This results in several challenges for you in consideration of timelines, and at times you miss out on the deal. 

Always note that the home loan procedure can take anywhere from 1 week and 3 months based on your property documentation, how ready you are with your finances for a down payment, income documentation, etc. The speed for processing of home loan generally depends on you. 

Also Check: Yes Bank Home Loan

What’s the process for placing an application for a home loan with digital lenders?

The process for placing an application for a home loan with digital lenders is a very easy and simple one. Here, you just require connecting with the lender in the following ways – 

∙       You can directly contact the digital lender on their toll-free number or WhatsApp them or mail them with your name, contact details, the city you are placed in, and the loan proceeds you require. Once you do this, a representative of the digital lender will get in contact with you to take you through the home loan application process. 

∙       After the team contacts you, you must provide your basic details like your property location, which you want to buy, ownership details, the KYC details of you as well as your co-applicant, your income, employment type and any other liabilities that you are serving. 

Depending on the details you provide the digital lender, the lender will pre-check your eligibility for a home loan and then visit your residence for further discussion. After this, your home loan application may be logged in for more processing. Post this, and the digital lender’s team will verify your details before uploading them to their system for final approval. Once your home loan application file is ready, then it is assessed by the lender’s senior executives for approval. If approved, you will be informed about the same. You must mail requesting the disbursal of the loan proceeds to your account to get the loan amount disbursed. Once the lender receives your mail for the disbursement of the loan amount, your loan proceeds will be disbursed to your bank account. 

What’s the best rate of interest offered for a home loan?

The best rate of interest offered for a home loan is by the public sector banks. After the public sector banks, private sector banks like Yes Bank home loan, Kotak home loan or HDFC may also offer lower interest rates. They are followed by the HFCs. 

All the lenders, to fix your interest rate conduct a detailed check of your credit score from the concerned credit bureau. Next, your income, your monthly expenditures, and your existing liabilities too are checked. Based on your credit profile and risk evaluation, the lender offers you the interest rate on the loan deal. 

What this means is that while certain borrowers might avail of a low rate on home loans owing to their excellent credit profile, others who do not have a strong credit profile may avail of the home loan at a higher rate of interest. 

Important consideration points you must consider before opting for a home loan for a better and hassle-free experience are as follows – 

∙       If you are looking to avail of a home loan through HFCs, then ensure that it is registered with NHB or National Housing Bank. Note that National Housing Bank is headed by the RBI or Reserve Bank of India.

∙       Opting for a manageable loan EMI, after accounting for your savings and investments and your other crucial responsibilities like children’s higher education, marriage, etc., is an important factor. This allows you to remain financially sound and worry less about any financial exigencies that may happen in the future, which may make you default on the home loan EMI. You can use the online home loan EMI calculator to calculate the appropriate EMI and repayment tenure as per your repayment potential and cash inflow. 

∙       If you mitigate all the parameters for home loan eligibility, then your lender may also assist you in getting a subsidy on the loan interest under PMAY CLSS (Pradhan Mantri Awas Yojana). It is a government-backed scheme providing subsidies on interest linked with a construction loan, applicable only to first-time loan borrowers. 

∙       Your home loan must contain life insurance coverage to ensure complete coverage in case of any mishap that happens to you. This will allow your family members to reside in the property as well as not pay any home loan EMIs. 

Apart from this, if you want to know about Top Things You Must Consider Before Opting for a Home Loan then please visit our Finance category

Noah Patel

Noah Patel is a finance specialist with over 10 years of experience in the financial industry. He has worked with a variety of clients, including individuals, small businesses, and large corporations, to help them achieve their financial goals. Noah's expertise includes financial planning, investment management, risk management, and retirement planning. He is dedicated to helping his clients make informed financial decisions that align with their long-term objectives. Noah is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. His mission is to educate and empower individuals to take control of their financial future. When he's not working with clients or writing, Noah enjoys traveling, playing tennis, and spending time with his family.

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