Being in India and taking a home loan is a big decision and must look at all important aspects to take a well-informed decision regarding a home loan 2023. One needs to be very careful while taking such big decisions as a little mistake might hurt you a lot in the future.
Given are the 8 most important things you need to ask yourself before you take such an important decision in your life:
1. How much loan amount do I need?
You should ask yourself the amount you need for your dream home, doing this would make sure that you stay within the budget during house selection. You should decide beforehand the amount you want to borrow as this will make it more comfortable for you as well as the bank.
2. Do I fulfill the eligibility criteria?
You should ensure that you are eligible for the loan. Some eligibility criteria include a good CIBIL score, credit history, reliable income sources, etc. These criteria would also ensure that you pay the least interest possible. Collecting all the required documents beforehand will make it easier and quicker to get a loan.
3. Which is the best bank to get the loan from?
Before applying for a home loan you should also research the best bank/organization that will provide you with the loan as it is very important to get the maximum benefit out of the loan you will take. For example, some banks provide lower interest rates, less processing fees, more flexibility with repayment, etc. Some organizations also give their premium services to their debtors.
4. How much time do I need to pay back the loan?
Before taking a home loan 2023 you should also decide on the loan reimbursement period according to your goals. The reimbursement period also decides the amount of monthly EMI and you should see whether it suits your budget. An ideal calculation for payable EMI is said to be not more than 25% of your fixed income, this ensures future viability for both creditor and debtor.
5. Which type of loan should you take?
Home Loans are of many types and before you take a loan you should make sure you know all the types and their benefits. For example, fixed rate and floating rates loans in which interest rate is either dynamic or fixed. Other types of loans differ in the number of benefits given and the documents required for approval.
6. Is the home loan for investment purposes or regular use?
Answering this question will make it easier for you to calculate the risk related to the loan and property as a property for investment will be good collateral and won’t hurt in the future if there is any problem in repayment of the loan. Moreover, if you’re developing a property to reap the benefits of rent or purchase then EMI payments will go easier on your pocket a bigger amount can also be taken as a loan.
7. Who should be chosen as a co-borrower?
This is an important thing that one should think about as you might not be eligible for a loan alone, in that case you need a co-borrower. Thus, you must have a reliable and trustworthy co-borrower, probably a family member. Having a co-borrower also reduces the chances of default and might fetch a better interest rate.
These were the seven pointers that you must consider before taking a home loan. Do you need other financial covers with this loan? One of the most important questions you should ask yourself before taking home loan 2023 is if you need other covers like life insurance or home insurance to safeguard your financial future and safety of your property.