Buying a house is like a milestone that’s an aspiration from when a person gets their first job! But finding your dream home with all of your savings solely can be quite draining. In times of a financial crunch, you can opt for a home loan. It is an easily accessible financing option in India when it comes to property buying. You can also check home loan eligibility with the help of a home loan eligibility calculator. It will show you the maximum loan amount you can borrow instantly.
However, during the festive season, getting a home loan is an ideal option that can get you better offers and a hike in the interest rate. But make sure you compare offers so that you can get a home loan with the best offers.
Here are a few things one should acknowledge when applying for a home loan this festive season:
1. The property’s legality: Before finalizing the property, builder credentials need to be checked. Builder’s reputation, past project history, and delivery track record are also quite important.
2. Affordability: Customers should figure out the EMI, which they can pay once a month. EMI will be dependent on the loan amount, the term of the loan, and the margin money being paid towards customers’ initial contribution.
3. Interest Rate: Customers must check out with various banks/HFCs on the rates being offered on home loans. One has to decide if one wants a home loan under a floating or fixed interest rate.
4. Tenure of Home Loan: Age is another determining factor for home loan eligibility. The tenure of the loan will also depend on the retirement age of the applicant.
5. Direct Dealing: Buyers must consider direct dealing and insist on visiting the bank branch and ensuring that all payments they make towards any fees are paid through the banking channel and cheque/ECS only.
6. Tax benefits: The interest portion of the EMIs paid for the year can be claimed as a deduction from the total income up to a maximum of Rs 2 lakh under Section 24 of the Income Tax Act. The principal amount of the EMI paid for the year is allowed as a deduction under Section 80C.
7. Documentation: While signing the loan application and disbursal documents, the buyer must ensure that all documents are filled in correctly. The cheque leaves which the lender will require must be properly filled with correct favoring, and no blank cheques should be provided to the bank.
8. Ensure home loan amount: Buyers should avail of insurance to cover the home loan liability. The mortgage company offers borrowers an option for insurance cover at a cost.
To get a complete break-up of the interest and the principal amount on your home loan, you can check with a home loan calculator and get a clear understanding of the amount that needs to be paid. It also helps in making an informed decision about the outflow towards the home loan every month. Therefore knowing the EMI is mandatory for calculating home loan eligibility and planning your home buying journey better.