What are the things that you should keep in mind when taking a home loan?
Generally, you take a home loan for buying a house / flat, plot, or construction/renovation. Sometimes home loans are also taken to increase or repair the house. We are giving you all the necessary information about the home loan tips here.
How much loan can you take?
Before starting the process of home loan, assess the amount that you earn and how much the banks can lend accordingly. Your ability to take a home loan depends on the capacity to repay it. It depends on your monthly earnings, expenses and family’s earnings, assets, liabilities, income stability. Banks first see if you will be able to repay the home loan on time. The more money you get in your hands every month, the more the amount of your home loan will increase.
Usually, a bank or lending company sees whether you will be able to give 50 percent of the monthly income as a home loan installment. The loan amount also depends on the term and interest rate of the home loan. Apart from this, banks also fix the upper age limit for home loans. If you want to repay a home loan soon, these home loan tips will be very useful for you.
How much home loan can you take?
10-20 percent of the price of a house or flat has to be paid down. This is your own contribution.
After this, home loans are available up to 80-90 percent of the value of the property with charges like registration, transfer and stamp duty.
Even if the lending institution approves you more in the form of a home loan, it is not necessary that you take the entire amount as a loan.
While purchasing the property, you should make maximum down payment so that the loan burden is minimized. The bank that gives the loan on home loan charges a lot of interest from you in the long term, keep this in mind.
Is an applicant required for a home loan?
Yes, in most cases co-applicant is required. If the property is in the name of two people, then it is also necessary to be involved in a home loan in that case. If you are the owner of the property, then anyone in your family can be an applicant.
What documents are required for the approval of the home loan?
There is a checklist of documents to be attached along with the application form of Home Loan. With this, you have to put a photo.
From the legal papers of buying a house, the bank has to give you a salary slip (verified from office and attested manually) along with identity and residence proof and the last six months statement of the bank with Form 16 or Income Tax Return. Some home loan institutions ask for life insurance policies, share papers, NSC, mutual fund units, bank deposits or other investment papers as a mortgage.
What is a Home Loan sanctioned and issued?
According to the papers given by you, the banks decide to give you a home loan or not. The amount of home loan also depends on it. If the bank has accepted your application and has decided to give a home loan accordingly, then the statement letter contains information about the amount, duration, and interest rates of the home loan.
It contains information about the condition of the loan. When the amount of home loan actually comes in your hand, then it is called disbursement. This actually happens after the technical, legal and valuation processes are completed. You can decide to take a home loan less than the amount that is in the selection letter. While getting a home loan, you have to provide an allotment letter, photocopy of title deed, sale agreement, and certificate of acceptance. From the day the loan amount came in your hands, interest is charged on it.