Buying a home loan is a lifetime possession for all. It does not matter whether you buy an apartment, villa, or a floor; your home is your sanctuary.
The persistently rising prices of residential properties across various Indian cities have made it difficult to make the property purchase through down payment. Thankfully, with the rising competition in the finance industry in India and push from the government for affordable housing for all, availing a Home Loan has become much affordable. Banks, NBFCs, Housing Finance Companies are offering high-value loans at extremely competitive Home Loan Interest Rates.
The opportunity is ripe for you to make the big move and purchase your desired residential property. There are certain factors that you must consider before purchasing your first residential property.
Being a first-time homeowner, you must consider various factors before making a final decision. Here is a comprehensive guide which will walk you through the crucial aspects of becoming a first-time homeowner:
The first step in your journey towards becoming a homeowner is to identify a suitable residential property. With numerous projects being promoted by various builders, making a choice can be difficult. You must, therefore, first understand your family requirements, preferences, and budget constraints while shortlisting a property. Also, check the legal status of the property and make sure that all necessary approvals have been obtained.
There are various areas where financial institutions do not offer Home Loans, so do have a look into this aspect. An ideal solution to this problem is to contact the builder or developer and ask for a list of the financial institutions offering Home Loans for that property. Once you have a list of the lenders willing to offer Home Loan, shortlist the one(s) with whom you would like to submit your loan application. If possible, get an in-principal approval letter from the financial institution to understand their terms and conditions.
Your credit score is a numerical representation of your creditworthiness. As such, it is a crucial parameter for financial institutions while assessing your Home Loan application. You must, therefore, check your Credit Score (CIBIL) to ascertain your Home Loan eligibility. Following is a brief analysis of credit scoring parameters followed by financial institutions in India:
The lenders will not accept your application if you do not meet the minimum threshold for credit score. For instance, to avail an IndusInd Bank Home Loan, you must have a CIBIL score of 750+. Also, your CIBIL Score has a direct bearing on the interest rate. Higher is your CIBIL Score; lower would be the Home Loan interest rate and vice versa. So, you must ensure your CIBIL Score is in the acceptable range for the financial institutions and, if not, work towards improving your score before applying for a Home Loan.
With the power of the internet at your disposal, you can easily compare the Home Loans from multiple lenders, including their eligibility criteria. Once you have shortlisted the lenders offering Home Loan in your area, compare the key parameters of their offers.
Some of the important aspects to compare include interest rates, repayment tenor, processing fees, eligibility criteria, prepayment charges, additional charges, etc. You need to compare the APR of each product and make an informed decision based on your budget.
Once you have shortlisted a few lenders to submit your application, it is now time to start the application process finally. Before you submit the application form, you must prepare the following documents:
Once you have collected all the documents, fill-up your application form, and submit the Home Loan application. A Lender would conduct a background check and get approval from the legal and technical department before processing the loan. If required, they will ask you to submit other documents, as required. You must comply with their requirements on an urgent basis. Also, keep in touch with them regarding the status of your application.
After getting a positive report from their legal and technical department, your financial institution will inform you about the approval of your application. You will then need to sign the loan agreement as well as other documents to avail the disbursal of the loan amount. The amount would be transferred directly to the account of the borrower or will be paid through a Demand Draft. Thereafter, you will get the legal formalities completed and submit the original title deed with the financial institution. The lender will then register a charge over the property and get you to sign the mortgage registration. With this step, your home buying process would be complete, and EMI repayment would commence as per the repayment schedule.
It would not be an exaggeration if I say that becoming a homeowner is a sweet culmination of many years of sacrifices and efforts. You must thus plan the whole process carefully and execute it diligently to maximize the benefits from your purchase.
To apply online for Best Credit Cards in India, Secured Loans and Unsecured Loans, visit mymoneymantra, the leading online lending marketplace that offers financial products from 90+ Banks and NBFCs. We have served 7 million+ happy customers since 1989.