Deciding to buy your own home is one of the most important financial decisions of your life. After all, you would be investing a large part of your lifelong savings in order to ensure that you have your own roof over your head. But before you are able to take a decision, there are various factors involved that require careful consideration. You only want the best for your family, and that’s why you will try and select the best possible property that meets all your requirements.
You must consider various aspects such as neighborhood, security, schools, amenities, and facilities while short listing a suitable property. But when you would have selected a property that fulfills all your requirements, you would realize that it is way over your budget. So, what would you do in such a situation? Would you just let your dream home go away? There is no need to think of such extreme scenarios, as you can Apply for a Home Loan to fulfill the aspirations of your family members.
Where Can I Get a Home Loan?
Home Loans are one of the most popular financial products in the market today and are offered by all financial institutions. Home Loans are a secured loan where you have to mortgage your property with the lender till you repay all the EMIs (Equated Monthly Installments). You can continue living in the house freely without any interference from the lender. Being a secured loan, the rate of interest on Home Loan is also very low and it offers income tax benefits too.
Are you thinking about “From Where can I Get a Home Loan?” Well, Home Loans are extended by both banks as well as NBFCs (Non-Banking Financial Companies) in India. It is a very convenient process to apply for a Housing Loan, and usually, the whole process is finalized in a matter of few days. But you must remember that taking a Home Loan entails a lot of responsibility, and you need to ensure that you have covered all the aspects before committing yourself.
Financial Mistakes to Avoid
It is very easy to make a financial error while availing a Home Loan, but if you make a mistake, the repercussions could be significant and might even include you losing out your home. So, you must carefully understand the financial mistakes that you must avoid while opting for a Home Loan to ensure that you have secured life:
- Not Comparing All Offers
It is a cardinal sin. Home Loan is a significant financial responsibility that you must bear for almost upto 30 years. So, you must research around, collect offers from various lenders, compare them and only then decide to proceed ahead with the most suitable proposal. A slight reduction in the interest rates can translate into significant savings in the long run and also reduce your monthly installment burden.
So, you must not follow anyone’s advises blindly. Do your own research and only after careful consideration, commit yourself to a particular lender. You can perform the research online as well as offline, as per your convenience.
- Being Ignorant about Your Credit Score
It is not that you are ready to purchase a property overnight. It is a time taking process and sometimes even takes a whole year before you are able to decide on a suitable property. During this time, you must keep a check on your credit score. All lenders want you to have a good credit score to ensure that you will be able to repay the EMIs on time.
Ideally, when your credit score is above 750, you get the lowest interest rates. So, you must ensure that your credit score stays above this level at all times. Otherwise, your loan application may be rejected,or the rate of interest on the loan would be significantly higher.
- Borrowing More Than What You Can Afford
Always keep your repayment capacity in mind while opting for a particular amount. Even if the lender assesses your eligibility to be higher, go not get greedy and only take as much amount as you can afford to repay. Even if it means buying a small property or buying the property at an inexpensive location.
If you borrow more than what you can afford to repay, you will struggle with the EMIs and might end up losing your home due to non-payment of EMIs.
- Not Understanding the Agreement
You need not rush through the loan agreement. There are various vital terms and conditions that you must understand, such as foreclosure charges, interest rate variations and types, pre-payment charges, and so forth. These could result in a significant financial burden for you later on. So, if you are not able to understand any particular terms or conditions, feel free to ask your lender and press for changes if you do not agree with them.
- Going for Higher Loan Amount
You must not go for higher loan amount if you do not need it. When you opt a higher amount, it means your monthly EMIs would be high,and you would be paying EMIs for an extended duration of time. This would result in higher interest payments from your side. So, if you can make do with a lower amount, then you must opt for a more moderate amount of money,so that the loan could be repaid in quicker time.
You must avoid making these financial mistakes when you are getting a Home Loan to purchase your dream house. Otherwise, it could turn into a financial nightmare for you.
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