Owning a home today is an essential need and a dream for everyone. This makes securing a home loan another necessity for buyers. Today, tenures for home loans range between 10-30 years, contingent on the age of the borrower and the home loan amount.
Tenure: The tenure of your home loan is subject to a few factors, for example, the borrower’s age, home loan amount, income, employment history and credit score. A longer tenor means lower EMIs which may seem highly convenient but interest costs are higher in the bargain.
Legal and technical clearances: Once you meet the eligibility criteria and all your documents are verified, technical and legal clearances are required after the financial institution verifies your property details and all its legalities. You should always ensure that you have clean and transparent property documents obtained from the developer.
Special offers and plans: The festive season is usually a great time for home loan applications and several lenders often provide lower rates of interest and waivers on processing fees and other charges. You can also check up the Credit Linked Subsidy Scheme (CLSS) under PMAY which permits first time home purchasers to get interest subsidies up to Rs. 2.67 lakh depending on certain criteria. Check for these aspects in order to lower your overall loan costs.
Co- applicant: Having a co-applicant helps you increase your loan eligibility and chances of getting your loan approved while there are dual tax benefits to be enjoyed in this regard. For female co-applicants, there are lower rates of interest which is an advantage.
Pre-Payment- Most lenders offer pre-payment facilities but you will have to check the charges and fees for the same. Some lenders have zero pre-payment charges for home loans while some have nominal charges. It is advisable to pre-pay your home loan as much as possible so that you save money on interest costs while your EMI also keeps reducing in the bargain.