Tips for taking Home Loan

Why do we need home loan?

Increase in population and scarcity of living space has brought in a huge fluctuation in property rates in last few years. Looking at the raise in demand of land to live in, it has given a boom to the industry of lands and now you can get the desired place if you have the required capital in your hands. This has given banks the opportunity to help you in getting a certain amount as a loan, which you can pay to broker or property owner as a onetime payment and become the owner of your desired property.

Useful tips while taking home loans

The amount that bank has provided to you as a loan can be returned to the bank in the form of monthly instalments and for providing this facility, all banks charge some interest on the amount that they have provided you. By this the bank also gets facilitated by the interest amount and even you get your own property without spending all your savings. But, there are certain tips or rather suggestions that one should keep in mind while taking home loans:

1. Interest Rates: While taking a Home loan you main focus should be on the interest rates applied on your loan. Whether the rates applied will be fix for the entire tenure or will it be a reducing interest rate. You should try to get the loan during the festivals as banks come up with some exciting offers during festivals like low interest rates or no processing fees scheme etc.

2. Trend of interest rates: You should do a brief study of the prevailing and the past interest rates, as the past record can give you an idea about the frequent changes in the rates of interest according to which you can re-think about your decision of taking loan. Make sure that the bank agrees to notify you of any changes in the interest rates for future correspondence.

3. Processing fees/ other charges: Banks do charge some percentage of your loan amount as processing fees in the name of processing your file quickly. So, make sure you do a proper research in the market and should opt for the bank who asks for a minimum or no processing fees or any other charges. You can even take help of the banks in which you have your salary account, and they can waive off your processing fees and other charges and can be a real help for you.

4. Pre-payment charges: The loan that you acquire from bank can be returned back with interest before the complete tenure of your loan. But, here some banks levy a pre-payment charge apart from the interest which makes it a bit expensive for you in making the complete payment before time. Hence make sure that it is mentioned in your contract as to what will be the terms and conditions of making a pre-payment and how much extra charge you will have to pay for it.

5. Transfer charges: During the tenure of your loan, you may come across some other attractive home loan schemes from other banks and you may also wish to transfer your loan to that bank. In this case also, you have to pay some amount as a transfer charge to your current bank and hence you need to be aware about the appropriate charges and should be documented as well.

6. Monthly EMI details: You should ask your bank to provide a detailed structure of the monthly EMI that you will be paying. Now-a-days, banks even provide the complete statement, including the future EMIs, which has all the necessary details related to your EMI as to when and what amount you have to pay as an EMI to bank.

Thus, home loans have made it possible for you to purchase a dream home which can give you a satisfaction of your better future but if the above points are considered while taking a home loan, this can save a lot of your money and can also give you a mental peace of buying the property of your choice.