Tips for best home loans

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Home loans are now a household term. Most people go for housing loans to buy a house, apartment or real estate property.

Buying a house is a lifetime decision and buyers always try to get the best property for their family.

For this reason, instead of relying just on personal savings, they opt for home loans for more finance.

Tips for best home loans

So, what are the benefits of going for a housing loan? In short, a home loan,
  • Saves tax- Home loans are exempted from taxation. This loan is relieved from taxes under Section 80CCE of Income Tax Act, 1961.
  • Increases probability of buying a home- Now people of low- or middle-income group can dream to have their own home with a housing loan. Most of the times, buyers can get as much as 80% of the price as home loan.
  • Has lower interest rate- Financial institutes charge lower rates of interest on home loans than on any other loan types, like personal loans. Indiabulls Home Loanscharge housing loan interest rate between 8.80% and 9.20%.
  • Comes with long tenurity- Home loans come with a long tenurity. Buyers can opt for as long as 30 years of time to repay the loan.

Top 6 Tips to Get the Best Home Loan

Keeping this in mind, almost all the financial institutes now offer housing loans. So how do you choose the best home loan? Follow the below tips.

Compare & Choose

This is the first and foremost activity you should perform before opting for a home loan. A home loan EMI calculator can help you make the right decision; simply choose the tenure for your loan, your annual income or salary, followed by which you will get the approximate amount of loan which you can take.

Besides the amount, you should also compare the processing fees charged by different companies. Compare the quotes provided by different financial organizations and opt for the one which fulfils your home loan requirements.

Make More Down Payment

Also known as bridge funding, this is the minimum amount which the buyer needs to pay for buying the property. Generally, customers need to pay 10% or 20% of the total cost of the real estate as down payment. If you can increase this amount, the interest amount on your home loan will reduce.

Go Through the Documents

Home loans are lifelong commitments. So it is very important that you go through the terms and conditions before opting for a home loan. A standard home loan agreement includes the interest rate, tenurity and total amount which is being paid as the home loan. It also includes the aftermath if the buyer fails to pay the EMI amount.

Keep your Future in Mind

Home loan is an engagement of almost 20 years. So just do not take a whooping sum as home loan. Consider the Equated Monthly Instalment (EMI) which needs to be paid each month till the complete loan is re-paid. A bit of forecasting is extremely important when choosing the home loan amount.

Try to Foreclose the Loan

If you are not willing to carry the burden of housing loan all through your service life, then try to fore- close the loan. Most of the financial organizations offer pre- closure of loans. So, if you can save the remaining amount, it can be used to close the loan prior to its tenurity.

Keep a Good Credit Score

This is important while applying for a home loan. Home buyers with a low credit score will get lower amount of housing loan than the ones with a better credit score. So if you are planning to take a housing loan then either try not to take any other loan in the meantime or ensure regular payment of the monthly instalments.

Opting for an incorrect home loan may have a negative impact on your finances. So choose an easy- to- pay housing loan.

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