Don't Just Consider the Interest Rates When Taking a Home Loan, Ask Yourself These Five Questions?

Interest rates on home loans have been falling ever since the lockdown. Customers can now avail home loans at much lower rates.

While interest rates are one of the critical factors borrowers look at when choosing a lender, it's essential to consider some other aspects too.

Banks offering cheaper rates can provide loans to borrowers with a high credit score. In such cases, borrowers need to look at Housing Finance Companies or NBFCs to get a better offer and faster processing of a loan.

Now that home loans are available at delectably low rates, the house you decided to purchase might be well within reach. You may not be wrong in deciding to buy it, but in a hurry, don't take on a responsibility that you are not prepared for.

Ask yourself these five questions before you borrow a loan:

1. Which one would you choose first: home or home loan?

Sometimes, it is true that in eagerness to buy a house; you finalize the deal with a broker only to find that the bank has refused to authorize your loan. What if the seller wants the payment within a specific time frame and you don't have the money? What if you are not able to provide the EMI or the down payment the financial sector demands.

Thus, it is essential to find out all the details about the loan from the lender, conduct due diligence, the loan amount, the processing fee, the other charges that the financial company levies. It will help you to calculate the exact amount you need at hand and the loan amount that you can avail of.

Also, there are various housing finance companies such as Shubham Housing Finance, Aadhaar Housing finance, where you can avail a loan with zero credit score.

2. Do you have a secure job?

The interest rates may be low, but is your job safe and secure? In these uncertain times, you need to be sure that your business or company is financially stable and your earnings are secure. So make sure that you will be able to pay the EMI in the long run before taking a large ticket loan.

3. Did you skip a loan during the lockdown?

Have you suffered a pay cut or lost your work due to the pandemic in the past six months? Or, maybe, you have refused to pay your credit card amount. All these changes will affect your credit score and the amount of home loan you can avail of.

However, with Shubham Housing Finance, you don't have to be worried about your credit score as Shubham Housing Finance doesn't look at your credit score. They offer you a loan based on your income and repayment capability.

4. Do you have funds for a down payment?

The Reserve Bank of India has directed banks and NBFCs to accept a maximum of 80% of the value of the property as a home loan.

Suppose, if you buy a house worth Rs 80 lakh, you will have to pay Rs 16 lakh as a down payment to the bank or housing finance company.

If you had been saving for the down payment and experienced significant losses during the pandemic. In that case, it is advisable to place the purchase on hold until you have accrued the sum needed instead of taking a larger loan. The larger the loan, the more significant the portion of the interest you repay, even though the rates are low.

5. Are you purchasing a house for investment?

If you buy a house for self-occupation and have ample funds for a down payment and EMIs, due to the low-interest rates. In such cases, this could be the perfect time to make a purchase. However, the cause of buying a house as an investment should not be a low rate of interest.

With Shubham Housing Development Finance Company, you can avail with minimum documentation and zero credit score. If you have any queries, you can write your thoughts in the comment section below.