5 Tips to Choose Home Loan According to your Need

20 Oct 2021 5 min read
Home Loan: 5 Tips to Choose Home Loan According to your Need - Afinoz

Finding the ideal property is crucial, but so is securing the ideal mortgage. Because the home loan you choose will be a long-term commitment, make sure you read through the following advice to choose the best home loan for you. Before applying for a home loan through any lender, you should read the eligibility check, interest rates, and repayment tenure of the loan.  

Tips to choose home loan according to your need 

Following are the 5 tips that the borrower should remember before applying for the home loan and get the property. Some key points are listed below:  

  • Tip 1: Start by putting money aside for a down payment. 

When you're looking to buy a house, it's critical to plan your finances. Your monthly budget should be set up to allow for a specific amount of money to be saved. This sum will be applied to your down payment. Depending on the type of loan you pick and the down payment you make, the down payment might range from 2.25% to 20% of the home's purchase price. 

Having money automatically deposited from your bank account/paycheck to a savings account is a terrific way to save money on a monthly basis. You won't be tempted to touch the money you set aside for your down payment if you do it this way. 

If your budget does not enable you to put down a significant down payment, a zero down payment loan is a wonderful option for house purchasers who can only afford a little down payment. 

  • Tip 2: You can check your credit score  

Those with good credit scores are granted the best home loan rates. Because your financial history implies that you are responsible, a strong credit score assures the lender that you are a good borrower. So, what should you do to ensure that you have a strong credit score and, as a result, amazing deal options? To begin, obtain a copy of your credit report so that you are aware of your credit profile as it pertains to possible lenders. If you are aware of this, you can take steps to enhance your credit score. You may pay to find your credit score on a variety of websites. 

Your CIBIL Score should ideally be greater than 750 in order to receive a favorable interest rate on your home loan. According to CIBIL data, home loan approvals are given to people with a credit score of 750 or higher. Your Home loan application may be rejected if your CIBIL score is low, or if it is accepted, it may be issued with a high interest rate. 

  • Tip 3: Double-check your financial documents for accuracy. 

When applying for a loan, you will need to obtain and furnish a variety of financial documentation. The speed of processing will be aided by having these documents available and in order. Above all, you must have at least the previous few months' pay stubs, tax returns, and bank statements, among other documents. 

  • Tip 4: Use a Loan Calculator.  

A loan calculator might come in handy when determining how much you can afford. These easy-to-use home loan EMI calculators can be found on the internet. They demonstrate how much your monthly payment would be in various scenarios (with different home prices, interest rates, down payments, etc.). They can be used by potential borrowers to determine how much they should borrow based on their current pay. 

  • Tip 5: Compare home loan offers and make sure you respond to your lender as soon as possible. 

Don't be deceived by similar-interest-rate loans offered by the lenders available in today’s market. There are a variety of other elements that can influence the cost of a loan. For instance, the points, fees, and so on. You must comprehend all of the various aspects that influence the loan's cost. 

Don't assume your work is secure once you've qualified for a home loan. Your lender may request to check the extra information such as checking the loan repayment and home loan interest rate, which you must answer as soon as possible. If you take too long to answer to the lender, the loan could be delayed, which causes problems with the home you want to could buy. Make sure you answer to lenders promptly to prevent losing out on the home of your dreams and the deposit you have put down. 

Compare the best banks offering a home loan at low-interest rates 

In the given table you can check the best banks offering a home loan at low-interest rates and pay the EMI amount according to the down payment:  

Banks 

Lowest Interest Rate  

Lowest EMI/Lakh 

Kotak Mahindra Bank 

6.65% 

Rs. 754 

Punjab & Sind Bank 

6.65% 

Rs. 754 

LIC Housing Finance 

6.66% 

Rs. 755 

State Bank of India 

6.70% 

Rs. 757 

HDFC Bank 

6.75% 

Rs. 760 

ICICI Bank 

6.75% 

Rs. 760 

Conclusion  

In this blog, you can get ideas for applying for a home loan and should remember some following points before availing of the loan. If you're short on cash or don't want to liquidate your savings, a home loan is a terrific way to get some help. Banks assist you in realizing your dream of owning a property by offering low monthly payments and the flexibility to choose your repayment term. You can also compare and apply for the current home loan interest rates before applying for the loan. Some banks offering the home at low interest rates are Kotak Mahindra Bank, Punjab & Sind Bank, LIC Housing Finance, State Bank of India, HDFC Bank, and ICICI Bank. You can also apply for a home loan through Afinoz.com, where you can get easy home loan offers.  

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