According to SBI, home loan demand from tier 3 and tier 4 districts in India is witnessing a rapid surge currently. The nation’s housing loan demand is also anticipated to double in the next five years. This credit option clearly continues to be the most favorable one to finance a property purchase effortlessly.
While sanctioning the funds has become easier today, thanks to reputed housing finance companies, borrowers must consider certain crucial factors before making an application.
Things to consider when applying for a home loan this year
Prospective borrowers need to consider the following when opting for a home loan in 2022:
1. Rate of interest
Home loan affordability depends on various factors, the primary one being the interest rate. Therefore, individuals should enquire about the home loan rates offered by multiple lenders and choose the HFC that provides the most reasonable prices. Note that there are three types of rates – floating interest rate, fixed interest rate, and hybrid interest rate. These have unique features and benefits, which borrowers must learn before opting for one in 2022.
2.EMIs to pay
When it comes to loans, EMIs play a major role in their repayment. Equated Monthly Instalments include both the principal and interest payables in specific portions and remain unchanged throughout the tenor. Borrowers need to pay the EMI of their home loan every month until maturity without any default.
Hence, it is important to check how much they have to shell out for a considerably longer period prior to availing of the credit. The most convenient way is to use an online home loan EMI calculator offered by prominent HFCs in India. The calculator will instantly show the EMI to be paid per month. Apart from this, the tool displays the total interest outflow and principal amounts separately so that borrowers can know how much extra they are paying toward the repayment. An advanced home loan calculator from leading HFCs also shows the complete repayment schedule. The best alternative comes with a home loan EMI calculator. This online tool eliminates all kinds of manual calculations and functions based on certain information from borrowers. This free-to-use online tool requires the total amount, selected tenor, and rate of interest to evaluate the EMIs instantly. As a borrower, be assured to enjoy the major benefits of calculating the EMI before taking a housing loan.
3. Down payment
Evaluation of one’s financial capability is necessary to make a significant amount of down payment for the property purchase. This is the fund borrowers have to bear from their pocket without straining other commitments. Determining this amount helps to assess the maximum credit they need to buy the house. Here, the bigger the down payment, the lesser the home loan value they have to avail. It eventually reduces the interest rate and other charges, making the credit more affordable.
4. Pre-approved offers for quick processing
Pre-approved offers from housing finance companies make the process of availing of credit faster and less complicated. Such schemes are personalized for existing customers and are available on a plethora of financial products, including home loans, loans against property, and more. To check their pre-approved offers online, individuals only have to share their names and contact details.
5. Current financial obligations
While a home loan offers multiple benefits, it can also cause a monetary burden if existing financial obligations are ignored. Therefore, industry experts recommend individuals clear their current debts before applying for new credit. This frees up money to repay the loan effortlessly and improves an individual’s eligibility to borrow. After all, they must be able to bear the hidden costs of buying a house too.
Besides the above, here are some additional tips on how to take a home loan successfully.
- Meet the eligibility criteria required by the financial company
- Ensure to submit the necessary documents that are valid and updated
- Maintain a healthy CIBIL score above 750 along with a clean credit report
- Bring down your FOIR within 50%
- Get a co-applicant and apply for a joint home loan to increase your eligibility
The Reserve Bank of India has maintained the repo rate at 4%, which has pushed lenders to keep interest rates low. Moreover, with reputed housing finance companies, the associated charges, including processing fees, statement charges, penalty charges, etc., are also impressively reasonable. So, for individuals planning to buy the perfect house for their family, this is probably a good time to go ahead with a home loan online.
Once borrowers identify the suitable tenor and credit value based on the home loan interest rate, they can apply for the credit with an online form. Representatives will get in touch once they submit it successfully.
With reputed housing finance companies, individuals can look for pre-approved offers to simplify the application process and save more time. Pre-approved offers are personalized for existing customers and available on various financial products like home loans, loans against property, etc. Borrowers need to provide a few personal details like name and contact number only to check their pre-approved offers online.