Things to be cared of while Applying Home Loan

                            

If the person is planning to purchase home in India with Home loan then, person should consider some of the points that will be discuss in the article. The person must know about the home loan approval, but here are the some points that can help the customer in availing the bets home loan deal.

1.      Interest rate

This is one of the critical factor that person must consider while applying for the home loan. The person must know that all banks or financial institutions have a different set of norms, so their interest rate also differs. The person should do research about it by the internet and compare interest rates of different lenders. The banks normally charge around 10% to 16% interest rate. It will help the customer in availing the best rate home finance.

2.      Loan Amount & Tenure

The customer should also consider the loan amount and loan tenure while finalizing the dealer. The customer should see that the person is getting the adequate amount and that too with the maximum loan tenure. The banks provide the loan amount only up to 85% of the home value and for the tenure of 15-20Yrs. The bank considers 40-50% of the net income of the customer while deciding the home finance.

3.      Documentation

The customer should submit all the documents properly, as a bank or financial institution can take action against the fake documents. The customer has to submit, residential proof, identity proof, age proof, income proof, property documents, employment details, 6 month bank statement and two passport size photographs.

4.      Eligibility Criteria

The customer must have minimum age of 21yrs in case of salaried and 23yrs in case of self employed. The maximum age or maturity of the loan can be up to 60 yrs in case of salaried and 65yrs in case of self employed. The customer must have strong profile, i.e. credit worthiness, regular income source, repaying ability and financial position. These are mandatory if the customer want to get home finance. However, these criteria differ from bank to bank.

The person should also remember that bank or financial institutions always charge the processing fee which is 0.5% to 4% of the home finance. This is an addition of the interest rate and the bank also charge prepayment charges, i.e. around 2% of the home finance; though RBI has given guidelines not to charge the customer if customer do prepayment.