What is Home Loan?
A home Loan is also a type of loan as other loans, called a mortgage. It is type of loan given by financial Institutions (such as bank, credit unions, or Lenders) to assist human beings and their families to acquire residential property. The Loan helps to borrowers to use a big sum of finances to buy a Home that they pay in given period of time; this period generally decided by banks, It usually becomes 10 to 30 years
Points to be kept in mind before applying for Home Loan?
Credit Score
Credit Score is one of the main factor which has ability to decide your Loan amount and ROI, Hence Check your Credit Score before applying Home Loan. A higher credit Score can help you to get Higher Loan amount at lower rate of Interest
Loan Terms
Before applying or Signing Paper of Home Loan agreement, we need to read carefully each terms & conditions because every banks has their own rules and agreement. Shorter Loan Period generally makes the higher monthly down payment but it decreases the Interest costs and longer Loan Period makes the lower Down payment but it increases interest cost
Loan options
Firstly we need to research suitable Home Loan in various Loan offers offered by various banks and institutions. Such as fixed rate, Pre payment charges, adjustment rate and many more critical terms
Lender’s Reputation
We should also come to know about our lenders from which we are willing to apply Loan; we should look details of customer’s ratings and experiences of old customers to ensure that you are working with a repudiated Financial Institution
Loan fees and overall cost
We should also have knowledge about what would be the cost of overall Loan like what would be the loan fees and what would be the interest of loan during the period, closing cost etc.
Affordability
Affordability means how much amount we can afford to repay without any hustle, for that we should analysis our income from all sources and all expenses including EMIs of other purchases and insurance premium etc.
Conclusion
by considering carefully all these points, you can create decision more effectively when applying for a home loan and you can experience a good feeling for owning a home