4 Common Questions You Should Ask About Home Loans
Buying a home is a big step for any individual. It requires a lot of careful thought and research. Buying a home through your savings is not entirely possible for most people. Even if you manage to buy a house with your savings or funding, it is not always a preferred way to go. Exhausting all your savings can cause future financial troubles, especially during emergencies.
A is a preferable way to make your dreams come true. If you want to opt for a home loan to finance your new house, there are many factors that you need to consider. If you are short on funds and look forward to buying a house of your own, a home loan is the best financial assistance. But before you begin to apply for home loans, make sure to ask the below-mentioned questions.
1. What Types Of Interest Rates Does The Lender Provide?
There are two types of interest rates at which the lender will offer you a home loan. These are:
· Fixed Interest Rate
A fixed interest rate remains stable throughout your home loan tenure. It does not depend on market fluctuations and is mostly suitable for short term loans.
· Floating Interest Rate
A floating interest rate varies during the loan tenure. It depends on the official cash rate and may go up and down.
Fixed and floating interest rates come with their own set of advantages. Therefore, while applying for a home loan, it is crucial to enquire about the types of interest rates the financial institution is providing.
2. Are There Any Hidden Charges?
When lending a home loan, banks may charge you extra/hidden fees that you can ask while filing the application. Ask your home loan provider about the list of additional charges or a printed document about all the costs involved. It will help you determine the overall value and affordability of the home loan over the entire tenure.
3. Is There A Freedom to Choose The Repayment Tenure?
The repayment tenure refers to the duration you take to pay off the approved home loan. The mandate for repayment and EMIs go hand in hand. Although opting for a longerterm may result in smaller EMIs, the interest rate to be charged increases proportionately. A shorter repayment tenure might result in higher EMIs, but encourage faster repayment at the same time.
So, enquire about the pros and cons of choosing a particular repayment tenure with your lender/bank for better planning and management of funds. You can also use a to know your repayment capacity along with precise EMI amounts.
4. What Are The Parameters That Decide Your Home Loan Eligibility?
Different financial institutions have varied parameters to grant a home loan. Some of the common factors that decide your home loan eligibility include:
· Income of the applicant
· Age of the applicant
· Assets and liabilities
· Stability of occupation
· Number of dependants
Make a Prudent Decision
Buying a house is one’s most crucial investment, and so is taking a home loan. Therefore, it is advisable to compare and explore your options carefully. Choose a reputable bank such as Axis Bank that offers home loans at affordable interest rates and quick approvals. You can apply for a minimum loan amount of Rs. 3 Lakhs and choose between fixed or floating interest rate as per your convenience.
Lastly, remember to assess your needs and requirements, along with your income, to determine the right home loan amount. It will be easier to plan the repayment.