Thursday, 24 March 2016

Understanding Home Loans While Buying Real Estate

Understanding Home loans while buying real estate
Many home buyers especially first-timers, choose the home loan route as the transaction value is large. There are many criteria that need to be evaluated and verified before arriving at this decision as the market is flooded with banks and financial institutions that are keen to offer home loans to the right customer. A few tips for the home loan process will be helpful:

Save for down payment: For the uninitiated, down payment is that part of the home property cost that the buyer has to contribute while buying a home. It is important that this amount gets saved and this saving needs to begin at the earliest possible. Putting aside a particular sum of money will add to this down payment amount. You can arrive at this monthly sum by understanding your monthly budget and savings in detail.
Also remember the higher your contribution towards the home, the lower your EMI. Opt for automatic deduction from your savings account to be transferred to another account to save regularly for the down payment amount.

Put your documents together: The bank or the financial institution that offers the loan for your dream home will verify your financial status and for this purpose, your financial documents shall need to be in place. For example, your Income Tax returns for the past three years, your bank statements, salary slips/certificates and investment details will be required. If the buyer keeps these ready at the time of applying for the loan, the process of disbursement is quick and hassle-free.

Compare Home Loan Providers: The loan market is full of financial institutions and banks and if your credit score and financial status is good, many of them would want you as a customer. You can compare the home loan interest rates, loan tenures, pre-payment charges and other rates before making your final decision. You can save a lot if you understand these calculations as the home loan may go on for 10, 15 or 20 years, which is a pretty long duration.

Credit :  +Ramprasad Padhi 
Mumbai Properties