Save money: Tips before you take a home loan
Oct 24, 2013
Source : The Economic Times

 

DELHI: Home loans can be very beneficial for property buyers, as they not only help you buy your dream home, but also help you save on taxes. But you must remember to choose the right home loan if you do not want to face the hassles in the process. Here are a few quick tips that you could keep in mind while applying for a home loan. These tips could help ease the complicated procedure a little bit and at the same time help you save some money.

Some of the tips that are recommended are mentioned below:

Research well - These days loan are made quite attractive for the buyers with low interest rates and additional schemes. Therefore it is better to educate yourself about the terms and conditions of each loan agreement so that you are prepared beforehand. Clarify all your doubts regarding the loan scheme before you finalize anything and don't hesitate to ask questions to the sales person even if you have the smallest difficulty understanding a particular clause.

Take a look at the EMI - Calculate the EMI that you will be able to afford beforehand. Remember that you know your money more than anyone else so keeping in mind your current job and income you can make an approximate calculation about the amount of EMI you can pay. Don't make hasty decisions on this one because paying penalties due to non payment of EMI on time can prove to be more troublesome. If you have a temporary job, there are other things to take into consideration so make a wise decision taking care of all the parameters.

Negotiate on the interest rate - Even though banks and financial institutions swear that interest rates are non-negotiable, they could still make a few adjustments if you list a few honest issues with the high rates. This can be done only if you have finalized the property you would like to buy and you need it as soon as possible. Also, if it is the end of the month, it could prove to be beneficial for you. Sales persons have an aggregate number of sales that they need to complete every month; so in order to complete their target; they are bound to give you certain benefits.

Loan eligibility - Carry documents which include information like your credit history when you make purchase of a loan. You should have paid all your credit cards and car loans on time in order to move a step higher on the eligibility while applying for a loan. If you have a clean record in your credit history for payments done on time, then you can use it as an advantage when applying for the loan. Also, try to focus on the tenure of your loan. If you opt for a long tenure loan then you will be paying more overall as the interest paid would be very high.

Additional charges to be kept in mind - When you are applying for a home loan, you need to be educated about the various other charges that the lenders add to the current schemes. They will add administrative and service charges or processing fees. These additional fess fall under the amount that is sanctioned in your name and not under the amount that you take home. So before you finalize any deal, you should make note of such additional charges that the lenders put into the scheme.

Read the fine print of the agreement carefully - Even if the home loan agreement with your bank is a bulky document, make sure you read it thoroughly. Sometimes, lenders may nod to certain points but in the end whatever is present on the paper will only be taken into consideration. So it is best if you could just spend some extra time reading the document carefully rather than getting stuck in complications related to the same later on. Never sign on a blank loan paper even if the sales person asks you to sign. Ask questions if you still have some doubts because at the end it is very important to be aware of every term and condition mentioned in the loan.

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