by avni Jadhav
Published Thu, Jan 4th 2018, 06:38 | Finance
Applying for a home loan is probably one of the biggest financial decisions you’ll make in your lifetime. That’s why this article will cover some of the basic things you need to know before applying for a home loan so you can draw the maximum benefit from your loan and enjoy a hassle-free loan process.
1. First understand loan specifications.
Research about the loan amounts being provided by lenders, some provide up to 90% finance depending on the loan amount. Find out about the interest rates offered by lenders; most finance companies & banks will provide you an interest rate between 8.35 and 10 percent per annum. Next verse yourself with the tenures; some lenders provide up to 30 years to repay the loan.
2. Charges are one the most important things to know before taking home loan:
Most lenders will levy charges such as processing fees, inspection and evaluations charge, document handling charges, prepayment charges, late payment charges, etc. These charges can add-up to form a substantial amount of money and some of them are non-refundable even if your loan is rejected, so do your research about home loan charges before applying for a loan.
3. Know your credit score before applying for a home loan.
Credit scores play a huge role in your loan’s approval or rejection as well the kind of interest rate you are charged, so you should know your credit score before applying for a loan. If it’s below 750, put-off your decision for a while and work on improving it before applying.
You’ll need all the legal documents pertaining to the house, along with identity and residence proof, last 6 months salary slips and Form 16A and last 6 months bank statements and photograph.
5. Terms and conditions:
This is one the most important things to know before taking home loan. You should read every line of the terms and conditions document and ensure you have understood it all. If you need to, hire a financial advisor to help you understand the terms before you sign along the dotted line.
These were some of the basic things you need to know before applying for home loan. We hope this article has been helpful and all the best!