Taking a home loan requires a lot of extensive research, pre-planning, and intelligent investment. Why? Since it is a long-term financial investment, you should consider several things to avoid any losses.
The foremost thing you should consider is being aware of people’s mistakes while applying for a home loan. In doing so, you will find the best home loan.
Choosing a short loan tenure
Taking a home loan that ends soon comes with a high monthly payment. Calculation of the monthly payment amount initially may seem acceptable and doable. However, most people fail to understand there will always be some unexpected expenses, making it challenging to repay the loan. So, it is always safe to choose a moderate or a long-term tenure.
Not comparing different loan offers
Every bank advertises that they offer the best home loan but do they?
When you go through the home loan pamphlets at a particular bank, you may think you have found the offer. And without taking much time, you feel like applying for the loan. It becomes more tempting if the lender gives the lowest home loan interest rate.
But it is a step that you should avoid at all costs. In-depth research and comparison of all the home loans are mandatory. It will help you learn about the difference in processing fees, charges, hidden costs if any, and lots more. Only then should you decide on your lender for the best deals.
Not maintaining a good CIBIL score
Your CIBIL Score is directly proportional to your eligibility for home loans. The CIBIL score or credit score consists of 3 digits ranging from 300 to 900. The higher your credit score value, the higher your chances of getting your loan approved.
Many people overlook their CIBIL Score and decide to take home loans. The lenders or bank evaluates the score to determine the eligibility for the loan. If found with a low score, they decline the loan. So, to get your home loan on time, check your credit score regularly and maintain a healthy score. A score above 750 is said to be suitable for loan purposes.
Ignoring the power of negotiation
Believe it or not, home loans are negotiable. Yes, you read it right. One may think it will be too low to negotiate when applying for home loans. But it is normal to try reducing the home loan interest rate or get them to cut one of the extra charges.
Not having an insurance cover
Insurance policies protect the customers’ families from any financial troubles in case of unforeseeable mishaps that may disrupt their financial inflow. This comes in handy in case of loan repayment as well. Buying the perfect house with the lowest home loan interest rate is good, but it is best not to burden your family with loan repayment fiasco.
Not have a backup financial fund
While insurance policies may help you recover financially in times of peril, it is always better to have another backup plan financially. Therefore, always keep aside a savings fund of a considerable amount that you will withdraw in case of extreme emergencies.
Taking a home loan seems easy only on television advertisements. But, the reality is way different from what they promise. So, don’t get blinded by their appealing marketing strategies, do thorough research, and avoid the mistakes mentioned above. And get the home of your dreams in no time.