Getting a home loan to purchase real estate can be an unnerving task. Even though banks always advertise that they are happy to lend, getting a loan sanctioned can prove to be challenging and time consuming. Often, we commit to a financial product without reading the fine print only to be surprised later. But with home loans, it doesn’t have to be that way. Escon Arena gives you four simple points to keep in mind when finalizing a home loan. This will help you get a quick sanction and ensure that the whole process is smooth throughout the tenure of the loan.
- Home Loan Eligibility: There are many factors which banks consider when deciding the eligibility criteria for an applicant. These include:
- Income: Usually, the instalments are limited to forty or fifty percent of the borrower’s income. Banks favor applicants with a steady income or salary more than self-employed people with varying income each month.
- Number Of Dependents: The number of dependents also determines a borrower’s repayment capacity. The smaller the number of dependents, the better.
- Existing Liabilities: Banks also consider your existing loans and liabilities if any.
- Number of earning years left: Your age determines the number of earning years left before retirement. Younger applicants are at an advantage here.
- Spouse’s income
- Types of Home Loans: Banks usually offer the following three kinds of loans based on the interest rates:
- Floating Interest Rate: In such a loan the interest rate is determined by the lender’s benchmark rate. The interest rate changes proportionately to the benchmark rate.
- Fixed Rate: For such loans the rates of interest are fixed beforehand. The fixed rate of interest is applicable throughout the tenure of the loan.
- Combination loans: Many banks offer loans wherein the rate of interest is a combination of fixed and floating rates. Part of the loan has to be repaid with a fixed rate of interest and remaining has a floating rate.
- Pre-approval of Home Loan: A lot of borrowers face the dilemma of whether to find a home first or to get a loan approval first. It is always advisable to get a pre-approval on the home loan before finalizing the property. This helps you be certain of your budget and search accordingly.
- Tenure: Longer the tenure, the lesser is the EMI burden. Depending on the borrower’s age, home loans can be sanctioned for a maximum of thirty years. But remember, the longer the tenure, the more you may end up paying.
All said and done, financial instruments must be bought with caution and only after thorough research. We hope that this article helped you to be more aware about the different aspects you should consider before applying for a home loan.
Escon Arena is a premier residential community which provides luxury flats in Zirakpur, Chandigarh. Our vision is to give the residents of Escon Arena a premium living experience in a perfect combination of world class amenities and natural beauty. Built across seven acres the Escon Arena society has more than three hundred residential units surrounded by lush greenery. Visit our website or download our brochure to experience the lifestyle at Escon Arena.