7 Things to Consider Before You Apply For a Home Loan in India

Given the low home loan interest rates, now is the best time to purchase a property, particularly for those paying rent. Before availing of a home loan in India, there are some essential things to make a note of. Some of these factors are listed below.

#1 Types of Home Loans

The different types of home loans available include a home construction loan, a residential plot loan, a home purchase loan, and a home improvement loan. Know about them and choose wisely.

#2 Property Price

The price of the property an aspiring buyer is looking to purchase on any home loan must not exceed five times their annual income. That way a borrower can pay for EMIs without compromising their standard of living.

#3 Credit Score

A borrower’s credit profile helps secure a more lucrative home loan deal. As a thumb rule, try and maintain a credit score of 750 and above.

#4 Documents Required for Home Loan

Before applying for a home loan in India, it is prudent to check the documents needed for the application. This will streamline and at the same time, help expedite the process. When applying for a home loan online, you can mail documents to your lender to avoid frequent branch visits.

#5 The 35/50 Rule

When applying for a home loan in India, the lender will check the borrower's income and existing loans and liabilities. Lenders do not lend an amount after which the loan EMIs exceed 45-50% of the monthly take-home salary of the borrower.

It is a good idea to avail of a loan where the EMI does not exceed 35% of the borrower’s monthly income while the total EMI must be limited to 50%. If a borrower does not have any other existing loans or liabilities, they may go up to 50% when it comes to a home loan.

#6 Eligibility Criteria for a Home Loan

When applying for a home loan in India, it is essential to go through the eligibility criteria, so that you can maximize your chances of approval. 

Read Also: Know How a Home Loan Calculator Makes Loan Planning Easier for You

Online Easy-to-Use Tools for Improved Decision-Making

A home loan is a long-term commitment and these days the availability of several online tools, such as the home loan EMI calculator, can help borrowers finalize a loan with the lowest home loan interest rate.

 

The Final Word

Use the above mentioned tips to secure a good home loan deal. To learn more, you can get in touch with us.