Acquiring a house for yourself or your family provides not just a place to call home but also serves as an investment in India. Irrespective of where the property is located, it will usually appreciate in value over time. It can also earn recurring income via rent and can even be used to apply for other loans at more favourable terms. Owning a house is not just a thing of security but an option that can be used to generate substantial income.
Today, aspiring homeowners don’t even need to have the entire sum of money to buy their desired property. Home loans are an exceptional option for those who don’t wish to use up their savings or don’t have the required funds. What’s more, with leading providers like ICICI Bank, borrowers can select a repayment tenure that suits their finances without hindering their quality of life. While a home loan can be beneficial in the long run, there are some things that must be taken into consideration before applying for one.
Applying for a Housing Loan: Things to Know
The points mentioned below can help simplify any borrower’s housing loan process and ease up the application:
- Do Ample Research on Home Loans
The internet can provide borrowers with plenty of information on various things, including home loans. So, they must conduct proper research on all loan options available and find the best deal. While comparing options, make sure to check the following:
- Repayment tenure
- EMIs and Home Loan Interest Rate
- Downpayment
- Prepayment and foreclosure charges
Assessing these factors helps borrowers get the right loan from the right lender on favourable terms. Since the amounts involved in a home loan are much larger than other loans, it’s imperative to go through all relevant information before applying for the loan.
- Spend Carefully
A household’s monthly expenditure is an essential aspect to consider when gauging the affordability of a home loan. When someone has to repay a home loan, it’s always good to set a proper budget to meet the monthly instalments without disturbing a person’s or family’s way of life.
Make sure you can pay off the EMIs conveniently to maintain a good credit score as well. If the loan is essential but not quite comfortably within the budget, see where monthly spending can be cut-back on.
- Pick a Reliable Bank for Home Loans
Pick a reliable bank such as ICICI Bank to avail of home loans. These banks have minimal documentation, smooth processes and competitive low current home loan interest rates along with supportive customer service. They also have longer repayment terms with fewer prepayment charges.
- Your Credit Score
Credit scores are vital aspects that financial institutions in India consider when offering any kind of loan to their customers. So, if you want a home loan on favourable terms, you must have a good credit score of 750 and above. Also, employed and self-employed applicants will have different terms and conditions.
- Pick the Best EMIs
The amount to be set aside as monthly instalments will be entirely down to the borrower. Banks like ICICI Bank have many options to match the needs of different borrowers. The EMIs will also depend on the borrower’s down payment towards buying the property.
If the down payment amount is larger, there will be less outstanding to convert into EMIs. Also, ensure that your EMI amount does not exceed your overall budget.
- Understand the Terms and Conditions
Before taking a home loan, borrowers should properly understand the “terms and conditions” of the loan. They should examine the various charges, home loan tax benefits, penalties, and fees associated with the loan. They should read every point properly and then proceed with documentation.
- The Repayment Tenure
Repayment tenure is the time a borrower takes to pay off their loan. Both the EMIs and the repayment tenure go hand in hand. If a borrower chooses a longer repayment tenure, it may lead to smaller EMIs, but this could increase the overall interest paid.
Conversely, your short repayment tenure may come with high EMIs, but the interest paid will be lower.
Conclusion
Home loans have helped countless Indians purchase the property they always wanted. Well-known and reputed banks, such as ICICI Bank, provide some of the best home loans to customers in India. Loan applicants can get a home loan of up to Rs. 5 crore through the bank’s online application procedure. Also, make sure to use the bank’s home loan calculators to calculate affordability, EMI, balance transfer, and eligibility before applying for the loan. Step into your dream home with affordable home loans today.