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Points to know, before applying for Property/Home Loan:

10 Jan 2020

While applying for a home loan the only thing that has an all-encompassing effect is the interest rates which are charged by banks. Though, anyone requirements would differ and one-size-fits-all theory may not apply to all property buyers and home loan seekers. Below are some important factors you should follow before applying for a home loan when buying a home or property in India:

Loan amount

Mostly, banks and financial institutions loans offered are up to 80 percent of the total amount you pay for your selected home. It is also consider for some banks for lending up to 85 percent. For example, If user shortlists any property on 3BRICK.com (real-estate website and android app, where end user can search for property and submit their own offer price against the builders quote) and base price of the property is 1cr. Then the loan offered by most of the banks would be anywhere between 80-85 lakhs. Though it also depends on financial capability of the loan seeker. Opting for the highest possible loan amount is always suggested, if you are on the low initial down payment. During the onset of your home purchase property, down payment is the amount which has to pay in cash. Sometimes property buyers mostly take personal loans or gold loans for down payment. Apart from being stressful (as this requires another lengthy paperwork), this might end up being costlier in the long-term.

Processing time

For processing home loans the time taken differs among banks. If longer time is taken by bank to process your loan, so several visits are involved to your bank branch. Check the dignity and ability of a bank or a finance company before you apply for a loan from them. While allowing home loans, banks always suggest buyers to apply for insurance policies too. Mostly, such insurance policies are either close affiliated of the bank or an insurer with whom they have a tie up. Despite it is smart decision to insure your home, the best quote for insurance might not necessarily come from the bank you are taking loan from. If you are willing to go with a combination offer you need to make all the calculations, consult others, and negotiate for insurance before you consider it.

The discounts

There are some financial institutions, specifically co-operatives and public sector banks which offers on festivals special discounts. Smaller interest rates are offered to women and senior citizens. If any loan is taken on such type of discounts, then it will result in huge net savings.