Purchasing a home is an exciting experience. It is natural for you to lean towards the decision of opting for a home loan through IDFC home loan or DMI housing finance, or any other lender to fund your home. However, it is advised to figure out the best home loan that is available to you so that you can get the best experience. While factoring in the rate of interest offered, capital required, processing charges and other fees, there are some other crucial aspects that you must consider. Listed here are a few of the tips you can use to have the best home loan experience.
Best tips for the best home loan experience
By efficiently following these tips linked with a home loan, you can witness a seamless experience across the home loan period. Read on to learn the tips –
Review your credit score
One of the most crucial aspects that lenders or banks will authenticate is your credit profile. By reviewing your credit score, they basically understand your credibility or creditworthiness. It is advised to hold a credit score equaling 750 or more. Holding a good credit score may fetch you other important benefits like lowered interest rates and processing charges. In case you want to ameliorate your credit score, you can do this by timely repaying your credit card dues, repaying your massive debts, etc.
Build your down payment amount
Based on your lender or bank, the down payment range might differ. Generally, it may go up to 25 per cent of the home price. While designing your month-on-month budget, ensure to put aside the required funds in the form of the down payment money.
Keep your financial documents handy.
During the procedure of your home loan application, you must submit a list of crucial documents. Ensure that you have all these documents handy in place so that you can easily proceed with the application procedure. Ensure that you hold all the crucial documents like address proof, identity proof, pay slips, bank statements, form 16, income tax returns and others.
Before you select a home loan, ensure to compare all the available offers. A few banks might provide a lesser rate of interest alongside other advantages. Compare all the offers and pick up the home loan that matches your needs.
Also Check: DMI Housing Finance
Use an online home loan calculator.
While you ensure that all the requirements for home loan application processing are ready, plan your repayments. Opting for an online home loan calculator is looked upon as the best financial tip as it assists you in planning out your budget in a data-driven way.
Know the details linked with your rate of interest
The rate of interest on your home loan helps you to determine your home loan cost. Thus, ensure to discuss in detail with your lenders about your rate of interest, to know whether it is a floating or fixed rate interest. This can assist you in remaining prepared as well as estimate well your repayments.
By opting for a pre-qualified home loan, you can expedite the whole process of availing of a home loan and getting the same verified. For a pre-qualified home loan offer, you must submit your personal and financial details like savings, income, and investments with property documents.
Actively respond to the lender.
In case you are contacted by the lender about more requests or requirements, ensure you respond quickly. This may assist you as a lender to keep the application for a loan active and swiftly move ahead with the procedure.
Understand distinct loan offers
There are various options when it comes to purchasing a home loan. For example, you can select either a fixed rate of interest or a floating rate of interest. Make sure you check with the lender about all options available.
Maintain your credit behaviour and good credit habits across the procedure
In the midst of the home loan authentication procedure, lenders might check your credit profile. So, it is wise to continue with good credit habits even while your application for a home loan is getting processed.
Make sure you hold a stable job.
When you stay at a job constantly, this shows the bank lender that you hold a stable income source and hence may not be a risky individual. Ensure to hold at least 3 years of work experience before placing an application for a home loan.
Ask crucial questions while placing an application for a home loan
Asking certain necessary questions is a prudent way to make sure you get the best deal on a home loan –
∙ Ask about the closing costs linked with home loan
∙ Ask the lender if there’s any foreclosure or prepayment charge
∙ Ask the lender if there’s any loan repayment tenure extension facility
Get all your financial documents ready
If you are determined to place an application for a home loan, the initial step is to get ready all your financial details. It means gathering the necessary documents like your pay stubs, tax returns, address proof, bank statements and identity proof.
Maintain savings for the down payment
Paying a down payment amount on a home is an important measure of the home purchasing procedure. The average down payment generally ranges between 10 and 40 per cent of the buying price, which means a lot of funds. Here’s why maintaining savings for a down payment is essential for the home loan procedure. It enables you to lower a huge sum, which can assist you in getting a reduced rate of interest. Additionally, it shows the lenders that you are responsible financially.
Paying about 30 to 40 per cent of the down payment is one of the best practices as it would save a massive amount over the long term.
While availing of a home loan, it is necessary to understand all the associated aspects. Additionally, ensure that you plan out your repayment schedule well in advance so that you financially can get prepared. If you are looking to place an application for a home loan, you can apply with a public sector bank if you hold a high credit score and good repayment capacity. However, in case you do not have a good credit score or repayment capacity, make sure to opt for the private sector banks or NBFCs.
While opting for a home loan, it is important to understand all of its associated aspects. In addition, make sure that you plan your repayment schedule in advance so that you can financially prepare yourself. If you are looking to apply for a home loan, you can apply for one with Piramal Capital Housing and Finance and experience several benefits, including quick loan sanctions.