Applying for a home loan is not as easy as it planning the complete renovation process. Home loans make financing your renovation projects easier. Since a home is the biggest asset in everyone’s life, one must think of it and apply for home loans. The purposes of home loans are not just renovation but you can also invest in real estate or expand your existing space. Your specific needs for taking out home loans can be accomplished easily if you know how to borrow money wisely.
Nowadays, many lending firms are available that offer home loans at competitive prices. In fact, borrowers are smart enough to check all the lending terms before sign the deal. Before the lending process initiate, you should know what your rights are as a borrower.
This guide will help you know your rights and make the home loan process easier:
Know Lender-Specific Eligibility Criteria
Home loan applicants always get confused about the eligibility criteria. They can apply for housing loans according to the lender’s specific terms. Generally, lenders prefer to shortlist the borrowers on the basis of their past borrowing records and debt-to-income ratio. Apart from this, a lender will look for your occupation, down payment, income, and age. But, make sure you also check every lender’s eligibility criteria separately. Not all lenders have the same lending criteria and this is why they have different eligibility requirements.
Interest Rates and Interest Type
People generally don’t know about the interest type. They don’t know what fixed and floating interest rates are. You will get served with the choices such as fixed, floating and mixed interest rates. You don’t have to pay extra if you go with fixed interest rates and the repayment will remain the same until the tenure is over.
In floating interest rates, interest rates are based on the existing and current marketing conditions and as per RBI’s norm. You may save bucks on interest rates if the market price is low but you have to be prepared to pay extra if the interest rates go high.
In the context of mixed interest rates, you have to pay fixed interest during the initial years and later you will be rewarded with floating rates and EMIs can change accordingly. Being a borrower, you should also be aware of interest rates and make sure to bargain with your lender and seize better deals on home loans. After all, it is your right to know the interest rates beforehand.
Duration of the Loan
Loan tenure makes a world of difference when you apply for secured loans. Since home loans are secured in nature and you want to get the best deals, you should consider the tenure of the loan according to your specific needs. The lender will give you choices on tenure and you can decide as per your ability to repay. You should also know that the loan tenure may affect the rates of interest charged by the lenders. If you want to get the most out of home loans, be sure to understand what duration or tenure option you have.
Associated Charges
If you want to make your home loan affordable and lucrative, you should understand the associated charges. You can connect with a dependable lending firm to understand what the associated charges are. You should always check the upfront fee and convenience charges that your lender may charge with the interest rates. Generally, people don’t think about its associated charges and consider a home loan as an expensive bet.
Know the Disbursement Policies
Disbursal of cash is an important factor that you must consider at all costs. You don’t have to worry about anything if this sounds confusing, as you can simply discuss your needs with your lender and know their lending policies. Every lender has different cash disbursement policies and you should understand them all to make home loan applications easy. In fact, you can decide how you will invest in real estate.
Maximum Amount You Can Borrow
Most loan applicants ask this question. They want to know the maximum amount they can borrow. If you are applying for home loans, you should know everything about how much amount you can borrow. This way you can get a clear idea of how home loan will work for you. The maximum loan amount decides whether it is a lucrative bet to apply for a home loan or not. This is why you should understand your borrowing needs and then get all the details about the home loans to make the right choice.
Understanding how the home loan can help you would not be enough for you. You have to provide valid documents to support your loan application. Documentation plays a huge role in the approval process. Now, know your rights and provide valid documents to get approval on home loans right away.
