Building your own house is the best feeling in the world and also the most stressful one. It is a once in a lifetime event that stays with you always. It requires tremendous planning can be quite draining, both emotionally as well as financially.
The housing finance sector has been in the fast lane and is booming. Investing in a house requires a large sum for liquidity, something that not everyone will have ready in hand. In such a case, exploring a loan option can be the best solution.
Poonawalla offers a Home Loan which can be of great assistance when you have a financial need for buying a home. Our lucrative and beneficial home loan offering comes with easy monthly instalments, longer tenures and much more. However, before we apply for a home loan, we should be taking care of a few factors which will help in taking better decisions.
Here are few essential factors to consider before taking a home loan
Check out other loan alternatives: Many financial institutes provide home loans. So, comparing some important factors such as home loan interest rates, types of interest rates (fixed or floating), repayment tenure and monthly EMI's can give you a clear idea. It helps you to choose the best option for your needs.
Check if you are eligible for PMAY Scheme: Pradhan Mantri Awas Yojana Urban (PMAY-U) was launched in the year 2015 by the government as an initiative to provide affordable housing. It is a credit linked subsidy scheme and the beneficiaries under the scheme get an interest subsidy if they are eligible as per the government-listed norms. In order to avail this interest subsidy, you should first check if you are eligible for this and if yes, you should look for a lender who is registered under this scheme so that you can get the benefits.
Check your Credit Score: Credit Score is one of the key parameters considered by lenders when they grant you a loan, be it home loan or any other loan facility. If you are thinking of taking a home loan, your credit score is one of the factors that decide the interest rate for your home loan. Maintaining a good credit score requires you to pay your existing loan EMIs on time. Your score is built over your past repayment track records.
Interest Rate: The rate of interest for your loan is one of the key factors that decide your EMI amount. While applying for a loan, you should compare the rate of interest offered by various lenders for your profile. Your credit score and monthly income are the key factors that generally decide your interest rate. You should also be aware about the fact that there are 2 types of interest rates – floating & fixed.
Special offers for your house: To assist you in your journey towards your dream home, financial institutes offer you a lot of offers. These offers can be highly lucrative and beneficial while availing the home loan. Offers on processing fees and other charges are some of the things which can help you to reduce the overall cost of borrowing..
Top-Up Facility: Most of the housing-finance institutions offer very lucrative top-up schemes. When you select your financial partner, do check for the schemes available for top-up, after your home loan is granted. Top-up is an additional loan amount that you can avail against your existing home loan. The major benefit of top-up facility is that the process is hassle-free, quick and with minimum documentation. Top-Up on your home loan brings you the funds at better interest rates compared to unsecured loans like personal or business loan. You can avail top-up for any of your needs like home renovation, wedding expenses, business expansion, or even for funding your child’s higher education.
Down Payment: Generally, when you avail a home loan, you are required to pay a portion of the total cost of the home, which is termed as “down payment”. This ideally ranges between 20%-30%. The rest of the cost is converted to a home loan with equated monthly instalments. If you have some extra savings, you can increase your down payment and avail loan only for the shortfall amount.
A housing loan is better than a personal loan: You can also buy your dream home by opting for a personal loan. However, achieving your goals through a personal loan can be more expensive. Personal loans may come with higher interest rates as it is a generic offering and can be used in various fields like housing, business, medical expenses etc. Also, the processing fees and other additional charges attached to a personal loan are higher than that of housing finance.
Always remember, financing a house is a huge cash commitment for many years, but it has the advantage as it is more convenient on your pocket and the price appreciation may increase your asset value substantially.
Taking a home loan also provides you with tax benefits and waivers. And the best part is, you get a beautiful house that you can call your home! However, you must consider these points before taking a Home loan. Poonawalla Home Loan offering comes with host of features and benefits like easy loan application process and minimum documentation.
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