Planning to buy your dream home? It is not always possible to save a substantially high amount to buy dream home or get cash ready every time. Home loans have made it easier and give an amazing opportunity to everyone to buy dream home. Home loans not only help you to buy your dream home, but also help you save on taxes. But taking a home loan for the first time is a nerve-racking task and a number of questions puzzle our mind. Doubts like which bank to seek loan from, which home loan is better etc, keep cropping up.
Here we have mentioned 4 important questions that you should ask yourself before applying for a home loan.
Can you afford the home loan EMI?
The major factor that influence home loan from borrower’s point of view is probably the EMI, the monthly instalment that buyer needs to pay towards repayment of loan amount. You know your income better than anyone else so considering all parameters including your job and monthly income you can make an approximate calculation about the EMI that you need to pay every month. Don’t make any hasty decisions about EMIs because paying additional amount for penalty due to payment failure on due time can be more troublesome.
It’s easy to opt for a bigger loan if you are expecting good increments in the near future. But don’t rely on future income. While your income would certainly increase, but so would your costs and financial commitments.
Which loan scheme is beneficial?
Nowadays, many financial institutions are offering quite attractive home loan schemes for property buyers. They offer low interest rates with many additional offers. But, it is always better to explore about the terms and conditions of every loan agreement so that you are prepared beforehand. Make clear all your doubt regarding the loan scheme before signing loan document. For further queries or to understand a particular clause you can ask questions to sales person of that particular bank.
Have you considered other additional costs?
The announced price is usually the BSP (Basic Sale Price) of the property. In addition to BSP, there are many hidden costs involved that could increase your expenses significantly. Also, there are other big-ticket add-ons such as the legal costs, registration charges and stamp duty payable to the authorities increase total cost up to 7-8% property price. In all, these charges can thrust up the overall property price by 25-30%. Make sure you should make note of such additional costs before you seal any deal.
Will this purchase force you to postpone other important objectives?
High EMIs and inactive property prices are not only the exertion that potential home buyers should be wary of. Their home buying plans can have serious effects on other financial goals, such as saving for their kid’s education and marriage and for retirement plans. If the home loan EMI is for longer duration, it will push other objectives out of the financial plan.
So calculate your trade-offs, be mindful and buy a house only if the purchase will not postpone your other important goals. Otherwise, wrong decision will results in asset-rich but cash poor retirement. Or not having enough money for your child’s education.
Considering these tips will help to ease Home loan procedure and at the same time help you to save money. For more tips about Home Loans visit Superise.com