Finance

4 Things to Ask Before Applying for a Home Loan

Have you been thinking of getting a home loan? Owning a property is indeed one of the most crucial financial decisions taken by an individual. Most of the individuals who wish to own a home, consider a home loan as their only option that can help turn their dream into a reality.

So, if you are considering applying for a home loan, it is significant to understand every aspect of it as it is a huge commitment. A home loan is a financial liability that requires you to repay the amount in a given time. Moreover, late payments and the inability to repay the loan can have an adverse impact on your credit score.

Thus, it is important to be sure while applying for a home loan. Here are a few questions that you must ask before signing the dotted line:

What Type Of Loans Do The Banks Offer?

Even while applying for a home loan, you need to be aware of all your options. Some of the prime lenders in India such as IDFC FIRST bank offer multiple types of home loans that cater to the various needs of the different borrowers.

Some of the popular home loan types include:

  • Home loan for under-construction property
  • Home loan for improvement
  • Home loan for a constructed property
  • Home loan for NRIs
  • Home loan for extension
  • Home loan for plot

All these types have different attributes and are suitable for specific purposes. You can check the loan reviews of the different banks to gain an idea of how these loan types are being used by individuals.

How Much Do I Need for The Down Payment?

Though you are getting funds from a bank as a loan, you still are required to pay a certain amount as a down payment. As per the RBI guidelines, 80% of the property cost can be sanctioned by the bank, the rest, 20% is required to be done from one’s pocket. So, before applying for a loan, check your home loan eligibility to understand whether or not you can afford to make the payment.

What is the Maximum Loan Tenure for Repayment?

Generally, the banks and other financial institutions provide a tenure of 5 to 30 years for repayment depending upon the loan amount and other features of the loan product. The repayment schedule can be tweaked based on certain factors like age, financial situation, and income of the individuals. Check for online loan reviews to get more information on the first-hand experience of different individuals during loan processing to make an informed decision.

What Tax Benefits Can I Enjoy as a Borrower?

You can enjoy the interest and principal deductions for your home loan under Income Tax Act 1961. For first-time buyers, more benefits are available under Section 80 EE.

Conclusion

People often face a dilemma when it comes to applying for a home loan. Applying for a home loan seems to be a daunting task but with the emergence of some of the most customer-centric banks such as IDFC FIRST bank, availing of a home loan has become convenient and easier in many aspects. These banks make sure that you get a step closer to the reality of building your dream home. We hope that now you will get all your answers regarding home loans and help you make a prudent decision.

Leave a Reply

Your email address will not be published.

Back to top button