10 Things You Need to Know Before Taking a Private Home Loan

Buying a home is one of the biggest decisions in our life. In fact, it is a once in a lifetime decision for many. However, to achieve this, you might require a home loan to purchase it.

While getting a home loan sanctioned is not that easy for the lower-income group. Shubham is a private housing finance companies which provides home financing need to the low-income sections of the society.

Take a look at some of the essential things to consider before you opt for a private home loan:

1. Understand Loan Specifications: Research about the loan amount and compare all the features provided by different home loan providers. This would include your types of loans, interest rates, tenure, pre-closure, prepayment charges, documents, etc.

2. Additional Charges: Additional charges are one of the most important things you need to know before taking a home loan as most lenders levy charges such as processing fees, late payment charges, prepayment charges, etc. on the basic loan amount.

3. Know your Credit Score: Credit score is one of the most essential things you need to know while opting for a private home loan.  An individual who desires to avail of a home loan should maintain a good credit score as it plays a crucial role in your loan process.

4. Documents: Although the home loan application form provides a checklist of all the necessary documents, the legal documents will ensure quick and efficient loan processing. At Shubham, we offer home loans with minimal documentation.

·          Duly filled application form

·          Proof of identity like PAN Card, Voter ID, and passport

·          Address proof – ration card, electricity bill, etc.

·          Property-related documents

·          Bank statements or passbook

 

5. Know your Home Loan eligibility:  Your total eligibility mainly depends on your loan repaying capacity. So, it’s better to avail of a home equity amount ready to be able to repay the loan on time.

6. Down Payment: Down payment is essential to be eligible for a home loan. In case of a private home loan, you need to fund a portion and the rest amount will be funding by the lenders. You can also use an online mortgage calculator to determine your price range to figure out what your down payment will be.

7. Repayment Tenure: A home loan EMIs depends on the tenure of your home loan.  It is sanctioned for a maximum period of 20- 25 years, depending on the customer’s eligibility. The fundamental rule of any home loan is that it should be repaid on time. Thus, it is advisable to choose a short repayment tenure with higher EMIs.

 

8. Choose  Suitable EMIs: EMI is the monthly outflow that goes towards repaying your loan. It is recommended to ensure that your EMI doesn't exceed 45% of your total income. You can easily calculate EMI through Shubham EMI Calculator.

9. Read Fine Prints: This is one of the most important things to know before taking a home loan. You should read each and every statement carefully and ensure that you understand the terms before signing the agreement.

10. Spend Cautiously: A factor that follows is the monthly expenditure. It is advisable to follow a strict budget to meet your EMIs, to maintain credibility, and to avoid an overdue or an increased interest rate.

With all the aforementioned points in mind, seeking a home loan becomes far more simplified. Let us know in the comment section below if you have any queries.