Buying your dream apartment with your hard-earned money in a city like Bangalore is a matter of joy and a result of your constant struggle. No more paying rents or being in the clutches of a landlord if you have found the apartment that both suits your requirements, demands and budgets, congrats! But, have you thought of availing a home loan? Your bank balance might be sufficient, but a home loan keeps your mind at peace and helps you with tax deductions.
There's an array of benefits that home loans offer, but keeping certain things in mind while selecting the right home loan is crucial.
We are to help you out with Seven things that must be considered while borrowing a home loan for your new apartment.
1. Are you eligible?
If you are new to home loans, you would first need to assess your eligibility for applying for a home loan. Apart from your income, your eligibility depends on many other factors, such as your financial obligations, current workplace, age, employment history, and much more. Apart from your financial strength, banks would also judge you by your credit score and profile. These factors are analyzed to understand your repayment capacity by the bank. But to improve your eligibility, you can have a co-applicant with a good income and high credit score.
2. The loan amount
A bank usually would fund up to 80% of the property's value, but again everything depends on your eligibility criteria and other few factors. Generally, banks lend loans that make up an EMI of about 50% of the borrowers' basic salary with dearness allowance. Thus, before getting ready for a home loan, try to repay all other loans you have like a car or personal loan, and keep your credit card bills lowest.
3. Tenure of the loan
The bank might ask you to take a loan with longer tenure so that you can reduce your EMIs. But, in that case, your interest in repaying goes higher. So, it is better to try and make the loan tenure smaller. For a matter of fact, during the initial loan tenure, the interest component is higher, and the principal part is comparatively lower.
4. Interest rates
It would help if you always went for negotiation with the lender to have a better interest rate that suits your monetary condition. A good credit profile works wonders to find a lower interest rate. Understand different banks' different structures and understand how their interest rates work and choose something comfortable for you.
5. Top-up loan and interior loan
If you wish to renovate your existing home or fund the interiors of the new home, you can always go for home improvement loan from any bank. It involves complete renovation of already owned property, upgradation, external and internal makeover and repair. Apart from this, you can also opt for top-up loan, which is a certain amount of money that you can borrow over and above your home loan.
6. Credit Linked Subsidy Scheme for 1st time Home Buyers
Credit Linked Subsidy Scheme (CLSS) is a component of Pradhan Mantri Awas Yojana PMAY under which, not only economically weaker sections, but also middle-income groups can avail of home loans at reduced EMIs. To avail CLSS benefits, individuals must fall into any of these income categories:
1. Economically Weaker Section or Lower Income Group - Annual income between Rs. 3 Lakh and Rs. 6 Lakh.
2. Middle Income Group I - Annual income within Rs. 6 Lakh - Rs. 12 Lakh.
3. Middle Income Group II - Annual income within Rs. 12 Lakh - Rs. 18 Lakh.
7. Understand the fine print
Before you avail the loan, make sure to understand the terms and conditions in depth so that there is a negligible chance of any risk. Do comprehensive research as the fine print is something that would impact a lot of your financial decisions. If possible, seek help from a financial expert.
In Bangalore, if you are planning to book Gomati Iris in Bommasandra that happens to be one of the most affordable ready-to-moving buildings, this would be a life-changing decision. Gomati Iris is approved by all major banks - SBI, HDFC, ICICI, AXIS, Canara, Karur Vaishya, Piramal housing finance etc. Gomati also provides loan assistance as part of its COVID-19 readiness initiative – all documentation work can be done at the comfort of your home, visit the bank only to complete your in person verification.
So, what are you waiting for? Apply for a home loan now and book your dream flat with Gomati Iris!