A decade ago, purchasing a home was considered a major accomplishment. With the arrival of multiple Housing Finance Companies, the scenario has changed. With online options that have simplified the application process, applying for home loans has become much easier.
Though the interest rate and repayment amount may make you reconsider taking out a home loan, there are a few options that can significantly reduce the loan burden.
Here are 6 strategies to get a moderate home loan:
- Be aware of your credit score:
Borrowers with credit scores over 750 are likely to get loans at the lowest interest rates. So be aware of your score at all times. Perform a free monthly check of your credit score online. If your credit score is low, try to raise it before applying for a large loan.
- Check your EMI affordability:
When selecting a loan repayment term, homebuyers should always consider their Equated Monthly Instalments (EMIs) affordability, as well as their repayment capacity and monthly contributions toward important financial goals.
- Consider a long loan tenure:
Because home loans are large investments with long-term commitment, new home loan borrowers should plan their home purchases with an understanding of their current and future commitments, as well as their EMIs. Consider prepaying or increasing your EMIs as your income grows to close out your loan sooner.
- Do not take too many loans and credit cards:
Because a home loan is a long-term commitment, you must keep an eye on your financial liabilities to avoid falling into a debt trap. When planning for an emergency fund, home loan applicants should always consider their loan EMIs for at least six months. This can help ensure that they have enough money to repay your loan if you lose your job, become ill, or become disabled. Consider putting your emergency fund in a high-yielding savings account, a fixed deposit, or a short-term debt fund.
- Pick the right property:
Sometimes it is not the interest rate that is the issue, but the property itself, which causes the lender to deny the loan. Many lenders have negative lists of properties and areas where they will not make loans. So, before you finalize a deal, find out if the potential property will be financed. If the property is on the negative list, you may have to choose the next best lender or fine-tune your property selection to meet the requirements of the lowest-rate lender.
- Insure your loan:
Home loan is a long-term commitment and the biggest loan in anyone’s life. Any unfortunate event in earner’s life, the family will be free of debt with the loan insured. In the absence of insurance, the family is forced to part ways with the dream home
Purchasing a home is a significant investment and responsibility that necessitates a meticulous plan to select the right property and lender. Vridhi can help you look into all of your options for making your home loan more affordable. We offer pre-built home loans, home construction loans, home expansion loans, and many other services. Vridhi uses affordable credit operations to transform the local housing finance capacity.