Buying a house is considered to be one of the most significant achievements in an individual’s life. However, this is no easy feat. With real estate prices soaring, it becomes difficult for a buyer to complete the property purchase by solely relying on their savings. To solve this problem, most people apply for home loan plans to get financial assistance. There are various loan plans that lenders offer, so you can do your research and get one that is a suitable option.
Now, before applying for a home loan, it is very important to first consider a couple of things. Since this is probably going to be the biggest loan you are going to take, it is important to ensure that your finances are in place to take care of it.
So, take a look at a checklist that can help put you in a better position to afford a home loan:
- Make sure to have an emergency financial buffer
Even after taking a home loan, there will be expenses that will have to be borne from your pocket. However, it is never a good idea to completely drain your savings while buying a house. There should always be an ample amount of funds to fall back on in case of a sudden expense coming up, such as a medical emergency.
- Maintain a decent CIBIL record
No matter what type of loan you are applying for, any lender will check your credit score before approving the loan application. Lenders prefer borrowers who have a good credit score as it reflects financial responsibility, which is why such borrowers get offered good deals such as a bigger loan amount at lower interest rates. This is why it is always best to maintain a good CIBIL record (750 or more).
- Use a home loan affordability calculator
To understand whether a loan plan is suitable or not, it is important to use a home loan affordability calculator. With the help of information regarding your monthly income, existing debt obligations, home loan tenure, and its interest rate, this calculator will provide details of the loan amount that is affordable.
- Keep funds for down payment ready
A home loan can cover up to 80-90% of a property value, depending on the loan amount. Now, you will have to cover the remaining amount. This can add up to a significant sum, so make sure to start saving in order to have the funds to cover the down payment.
It is important to be aware of these things before applying for a housing loan. In addition, it is important to check with the lender regarding their loan eligibility criteria. Different lenders can have different criteria for home loans, which is why it is best to check about this before applying for a loan. This will help avoid any confusion and ensure a smooth process when you are applying for a home loan.