Purchasing a home using a housing loan may be a long process if you are relocating to India. It consists of various stages that include applying for the loan, completing the paperwork, making the down payment and paying for the stamp duty and registration charges and then paying regular EMIs towards repayment. From application to approval, a home loan involves a lengthy process, it requires adequate planning too. Thus, as a first-time homebuyer, you should treat this process with more attention and follow certain tips to ensure your application gets approved without delay. Also, it is important to select a lender for your housing loan, who offers maximum flexibility with respect to loan terms and repayment.
Here is what you should keep in mind while buying a home for the first time.
1. Research real estate developments to select the right home
The real estate market is always evolving. On the one hand, newer building developments are taking place, modern laws are being proposed to add more convenience to homebuyers. Thus, when you plan to buy a home, especially if it is your first home, be sure to check these schemes. Buying a house in India for example, under schemes like Pradhan Mantri Awas Yojana will allow you to claim subsidies on the interest of your housing loan. Plus, you can make the most of RERA which brings in more transparency and eliminates unscrupulous builders from the mix. Choose a property with the potential to increase in value in the future to ensure that you get a home loan easily and for an amount you want.
2. Choose a good loan offer
Home loans with banks are often sanctioned on restrictive terms and involve a lot of paperwork and formalities. This delays the process of sanction. So, check to see if borrowing from an NBFC is better for you. Another important aspect of the difference between the banks and the NBFCs is that banks always sanction loans on the MCLR rates that are governed by the RBI. Getting lower interest rate loans can be a problem in this regard. However, choosing NBFCs will allow you to get a sanction on your Housing Loan of up to Rs.3.5 crore on easy terms and a nominal interest rate as well as a 3-EMI holiday and the availability of an affordable top-up loan. For NBFCs, the PLR rates determine your home loan interest rate. Thus, once you meet all the eligibility criteria, you can negotiate the loan terms based on your financial standing and receive a competitive interest rate that promises that your home loan EMIs are affordable.
3. Remember to check eligibility before applying
Before borrowing a housing loan, it is essential to check your home loan eligibility. You can do this using the home loan eligibility calculator. Every lender sets unique terms and conditions based on which they grant you a sanction. Thus, abiding by the terms of qualification for your chosen lender will help you get a faster sanction of a sufficient sum. Your eligibility is primarily decided based on your age, salary, and city of residence. So, it is important to check this to make sure that you apply on these conditions to fetch competitive home loan rates on your housing loan.
4. Save for the down payment
As a first-time homebuyer, you may not be well-acquainted with the housing loan procedure. However, it is important to know that you will have to pay a lump sum upfront to complete the purchase of your house. The home loan will fund up to 80% of the home price, but 20% of the amount is your responsibility. So, plan your down payment in advance and make use of your investments or savings to fund this.
5. Plan your repayment in advance
Your housing loan is a lengthy commitment. So, to make your repayment comfortably, calculate it in advance. You can use the Home Loan EMI Calculator to check this figures in advance by inputting the loan tenor, interest rate, and loan amount. Applying for the loan on pocket-friendly terms after calculating your home loan EMIs will ensure that you find it affordable all through the tenor. Additionally, you can check to see if you prefer taking your housing loan as Flexi Hybrid Home Loan from any NBFC. This will give you a principal holiday for the first 4 years of your tenor. Also, you can make part-prepayments on your principal anytime during the tenor at no extra charge. This gives you a chance to manage your cash flow more easily.
Armed with these handy tips, apply for a housing loan now on simple eligibility terms and low-interest rate to become a homeowner in no time.