Housing loans, home loans in India, cheapest home loan

How to choose the best housing loan deal?

There is no such place like home on this earth. It’s the place where you create memories with your loved ones and it reflects your personality. When you choose your dream home, you do a lot of brainstorming, make a careful inspection, about the area, amenities, commuting, and other things. With the emergence of housing loans from leading banks and finance companies, it has become an easy task to get the necessary financial support to buy your home. Today, top lenders offer home loans in India to buy, construct, renovate, improve or extend their homes. But the most important thing that would decide your sanction amount is your home loan eligibility, income source, and installment that you can afford to pay towards the banks or finance companies.

Your credit score is one of the important things that will determine the home loan amount. When you keep all your prior loan payment clear and repay them on time, it improves your score. When you have a score of around 700 and above lenders believe you’re a responsible borrower.

Here are a few factors that you should address carefully before applying for home loans in India:

Income Source

The first thing lenders would evaluate would be your profession and its stability. Lenders would give preference for salaried individuals who work for multinational, semi-government and government organizations and similarly for self-employed there a better chance for loan sanction of doctors, lawyers, architecture, etc. So, if you have been in your job for a year and willing to quit or change, hold back, it will diminish your chances of loan approval. You can find some of the cheapest home loan deals online if you have good job stability and regular income source.

Savings

Home loan providers will fund 80 to 85% of the property value. The remaining amount has to be borne out by the borrower itself. Therefore, you need to display bank or financial institute enough savings at the time of loan application. Make sure you have saved at least 15% to 20% of the down payment, and have little extra savings to cover a few months of your home loan payment. This will help you combat under situation such as job loss, recession, ailing health issues wherein you can go to work, etc. so it’s better to stay prepared with a couple of EMI savings in advance.

Define your expectation

Always make a thorough inspection of your house and its vicinity, before you sign the deal. Your property value can help you get the cheapest home loan deal if its bound to rise in the near future. The location, transportation, access to malls, schools and college, and essential service can reap good benefits in the future. Another important thing is always taken a housing loan which you can afford based on your income source and risk potential.

Debt-to-income ratio

Any form of prior financial commitment will impact your loan eligibility. If you need a higher loan limit, lenders won’t be able to grant it, as a portion of your income is already being utilized to pay the existing debt. Your debt-to-income ratio plays an important role in determining the housing loan amount.