7 Things to Consider before Applying for a Home Loan

Investing in your dream home is now easier than ever with home loans being offered by any and every banking and credit institution. With so many options available, choosing the best offer can sometimes be overwhelming. If you are hoping to secure a home loan, here are seven things that you might want to consider before applying. 

Do a Thorough Search of Available Options

Finding the best offers for a home loan is now conveniently at your fingertips. Make well-informed decisions by doing extensive online research before applying for a home loan. This ensures that you can take advantage of a loan offer that fits your needs and that offers a good interest rate. Pay close attention to these three factors prior to taking a loan: 

  1. Down Payment
  2. EMI’s or Equated Monthly Installment Amount
  3. Repayment Tenure

It would also be helpful to explore the details of the loan by uncovering the essentials before, during, and after taking the loan.

Check Eligibility

As a part of your research process, be sure to check the eligibility requirements that are set by the financial institution that you are considering applying to. Most of this information, such as the eligibility criteria can be found on the bank or credit union’s website.

Choose a Loan that you can Afford

It’s easy to choose a home that you like in the area that you want, but affordability should also be taken into consideration when applying for a home loan. Ask yourself, “Can I afford to maintain my loan repayment amount on top of my monthly cost of living?” If so, also take into account potential unforeseen expenses and make adjustments as needed.

Be sure to pay your monthly installments both promptly and regularly. This way, you can maintain your credibility and avoid paying overdue balances with higher interest rates and penalties.

Decide on a Workable EMI and Repayment Tenure

Be smart in choosing the most workable monthly installment rate and repayment tenure. These two work hand-in-hand, and deciding on the most favorable set up requires some serious thought and consideration. Your EMI’s rely heavily on the down payment amount. The interest rates on the other hand, are calculated based on your repayment tenure. The shorter your tenure, the lower your interest rates will be, but they will accompany higher monthly installment rates. Choosing to pay lower monthly installments towards your home loan, however, will lengthen the time that it takes to pay the loan off, and interest rates can increase the total repayment amount by as much as three times the amount of the original loan. Find a sweet spot that works for you and your budget.

Maintain a Good Credit Score

Your credit score can be vital for your home loan eligibility. Keep a good credit score by maintaining regular loan repayments. A CIBIL score of 750 will give you better interest rates as well as a higher chance for quick loan approval and disbursal timeframes.

Learn about the Terms and Additional Charges

Are you considering completing the repayment of your home loan’s balance before its maturity? Learn about the foreclosure terms of your home loan. This can help you clear your debt sooner. Also, read up and ask the financial institution about any relevant application and processing fees, additional charges, one-time fees, and monthly fees that your loan may incur. Its best to learn of these things ahead of time so that you can take these additional charges into consideration when deciding on the rate of your monthly installment. 

Read up Before you Sign 

The nitty-gritty details are always found in the fine print. The home loan’s agreement documentation is laid out to ensure that both parties agree and are satisfied with the outlined information. Be sure to carefully and thoroughly review the documentation before signing anything to avoid any untimely disagreements with your financial agency. By examining the documentation in detail, you will also have  some comprehensive knowledge about the loan.

If you are planning to take a big leap and invest in your future home, Calcite Credit Union offers competitive rates for your home equity loans. We keep it simple and easy. Let’s make your dream home a reality. Contact us today!

 

By |2019-10-31T13:20:37+00:00October 21st, 2019|Mortgage|0 Comments