5 Things to Know Before Taking Home Loan: Buying a home is a long-cherished dream of every individual in India. A warm and comfortable abode sets up a stable base to securely raise a family and is essential to lead a cozy life in a metro like Hyderabad.
But just like all dreams, buying a right home requires diligent planning to strike the right balance of comfort, value and ROI while minimizing the financial risk in the long run if you chose to opt for a home loan.
Home Loans – Enabling Everyone to Own Their Dream Home
While the skyrocketing property prices in a metro like Hyderabad has made it extremely difficult to own a comfortable home on your savings alone, home loans can offer help to buy your dream 2BHK/3BHK in Hyderabad by offering an easy financial solution. Home loans offer up to 80% of the total price which can be repaid in a flexible tenor, stretching up to 15-20 years without putting an additional burden on your financials.
However, given its one of the biggest financial decisions of our life, one must tread carefully before choosing the right loan to make their dream come true. If you are first time home buyer then here are 5 basic things you must know before taking a home loan in 2020:
5 Things to Know Before Taking Home Loan
1. Home eligibility criteria and lending amount:
Every bank follows its guideline while assessing the eligibility criteria and the total lending amount. The lending bank evaluates the financial strength and repayment capacity of the borrower by taking CIBIL score, age, the stability of the income source into consideration.
After the burrower passes the preliminary criteria, the total sanctioned amount can depend on a variety of factors that include total income (basic + DA), no. of dependents, the status of the loans prior taken and even the value of the property. Banks usually cap the lending amount at 70-80% of the property value given all the fine points of eligibility criteria is satisfactorily met.
2.Types of home loans:
Home loans are characterized by two types of interest rate: fixed and floating interest rates. While fixed interest rate charges the same interests on the amount taken devoid of change in interest rates in the future, floating rating changes as per the market fluctuations. Given the interest rate dictates the amount of EMI you pay monthly and also the total amount of amount you repay, it is advisable to choose the best option based on the options available.
Though fixed rate seems attractive, experts advise on sticking to floating rates since interest rates usually come down in a healthy economy and even with the fixed rates banks can invoke the reset option to change the interest rate. Buyers are advised to seek help from an expert before choosing the right option.
3. Know the foreclosure norms and additional charges:
Often the most overlooked aspect of the home loans is the foreclosure norms and additional charges levied on the burrower. While RBI has laid strict norms on the foreclosure charges few of the NBFC (Non-Banking Financial Companies) charge up to 4% on the outstanding amount in the event of foreclosure. In addition to this, few banks can levy administrative, service, processing or other miscellaneous charges which can be a one-time or even a monthly affair. So, knowing the details of foreclosure charges and any other miscellaneous charges beforehand can help you save a lot in the longer run.
4. Negotiate the lone rate:
Yes, you heard it right, you can negotiate the interest rate with the lender especially if you have been a valuable customer with a good banking history with the bank. Even though they are lending you their money at the end of the end it’s only a business deal and no bank would like to lose a valuable customer with a good track record and same goes with any other lending institution. But make sure you have a good track record and comfortably check all the boxes of legibility criteria to increase the likelihood of a better deal.
5. Find the right time and the right deal:
Even though you are eligible for a high loan amount, it is always helping to set a prior budget for your home while you embark on the search. Having a clear-cut idea about your needs and budget helps you avoid overspending and burrowing heavy amount which can place a heavy financial burden in the longer run. Especially if you are first time home buyer it always pays to stick to affordable luxury options available and fortunately, they are plenty.
Take our NSL East County for example. With the lush green ambience, world-class facilities, amenities, top-class infrastructure our gated residential community offers luxury 2 BHK apartments for sale in Uppal at affordable prices. While our gated community offers the best living experience possible in Hyderabad, the booming location of Uppal guarantees you the best ROI for your investment making it a perfect choice.
So, we advise you to remember these 5 things to know before taking home loan and choose the right affordable deal with high ROI to find the right time to apply for the home loan preferably when the interest rates are low, which fortunately is today. Yes, home loan rates are at their lowest today and are the perfect time to buy a 2BHK/3BHK in Hyderabad. For complete information on the topic you can check out our previous blog article here: Two Reasons Why This Is the Best Time to Buy a House in Hyderabad. That said, great timing as far as loan rates are concerned and availability of versatile housing options today, this could be the best time to grab your dream 2BHK/3BHK in Hyderabad for a great price.