We all have that need to belong. And (for many but not all) homes have provided that sense of belonging since the time we were born.
But before you buy a house or even consider buying one, you must have a clear idea of your finances. Keep a clear budget in mind, adding in all the expenses, and then take a deep breath.
It is important to determine which loan suits your situation best. Among the factors to consider, interest rates, loan tenure, loan to value ratio, and processing fee are just a few. Furthermore, when you apply for a home loan, it requires a specific procedure to be followed.
The first step in getting a home loan is you must be able to identify the different types of home loans available ( A broker can help you with this!)
Before applying for a home loan, you will also need to consider the eligibility criteria. The 3 main things are:
- Income – this is the most important aspect that determines your home loan eligibility. Depending on the number of dependents in your family, almost all banks calculate an amount you can comfortably pay in the form of EMIs after taking care of all monthly expenses.
- Credit score – your credit history has a direct impact on the loan amount the bank sanctions. If you have diligently paid all your loans in the past without any defaults, then you stand to have a good credit score.
- Deposit – major financial institutions and banks also consider the value of the property before fixing a loan eligibility amount. Most banks demand that you contribute at least 10-15% (we recommend at least 20%) of the cost of the house as the margin money or down payment, and this is applicable even if your income and credit history justifies a higher loan amount.