A Comprehensive and Easy Home Loan Guide

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Are you planning to buy a new home for your family? In this article, you will find impressive guidelines that will help you to understand this comprehensive process.

Image Credit: Realty Assistant

A home loan is a long-term financial commitment and buying a home is something everyone looks forward to, it is one of the most important decisions that everyone aspires to make one day. In this article, you will discover various aspects of home loans. The prices of houses and apartments are increasing daily, and investing early in a home will allow you to have a better life. And going for home loans allows you to acquire a lot of benefits as well. If you are wondering what these benefits you might get apart from debt and a place to call “Home”. Here are some added benefits of going for a home loan:

  • Indian Government offers Tax Benefits for mortgage loans under section 80C and Section 24B
  • With regular mortgage payments, your Credit Score can be better effectively
  • Long-term home loans offer Lower Rates of Interest along with fixed and adjustable interest rates
  • The growing assets in real estate are a great way to work on your finance
  • Investing in houses is an Appreciating Asset, which will give you more return in the future
  • This will allow you to have access to liquid assets and they will Remain Liquid
  • You will get Relief from Rent afterwards
  • Some lenders offer lower ROI and this becomes a Refinancing Facility

These are some of the most beneficial traits of home loans for buying a house. But to understand this comprehensive process you need to have a more elaborated understanding of home loans. To work on your prosperity and growth, you need to read and understand the article properly.

  • Understand Home Loan

A mortgage also known as a loan is a fiscal arrangement between the bank and any money lender with a money borrower. A borrower is a person who is willing to buy a home; the bank lends the money to the borrower and they can offer it to the seller and the borrower offers to return the money with investment to the bank in a certain amount of time. The time offered for a home loan is between 15 to 30 years and the borrower offers the property as the security asset for the loan. Various types of loans are available in the market and you need to understand which loan option would be the best for you. There are majorly 5 Types of Home Loans, which are:

  1. Regular Home Loans – this home loan is applicable when you are investing in a freshly built property
  2. Fixed-rate Home Loans – In this loan option, the interest remains the same for the 15 to 30 years of payment.
  3. Floating-rate Home Loan – In this case, interest rates often fluctuate and change over the period.
  4. Combination or Hybrid Home Loans – this home loan offers the features of both Fixed-rate Home Loans and Floating-rate Home Loan.
  5. Loan Against Property – Sometimes borrower use their properties to go for the loan money.

The borrower of any of these sorts of home loans are compelled to pay on time and in case they fail to do so there will be severe damages made to that person. And this brings us to the next point of going for a home loan.

  • Home Loan Eligibility

When you are applying for a home loan you need to be eligible to make this offer, and there are various aspects of this. If you are wondering if you are even eligible for home loans or not, there are many “Home Loan Eligibility Calculators” available online, and you can choose from any of them and calculate your measure to understand whether you are eligible for home loans or not. To check your eligibility these are the factors you need to check:

  • Personal Information – name, contact details, residential address, etc
  • Income details/ annual income
  • Education details
  • Business/Employment details
  • Property details – residential/commercial address, etc
  • The estimated property cost
  • Present – means of financing the property
  • Identity proof
  • Income proof
  • Age proof
  • Address proof
  • Employment proof
  • Education proof
  • Property details

These are the basic required documents that are essential to apply for a home loan, and after that, there will be a comprehensive [process that will allow you to get the loan to buy your dream house and make it a home for your family.

  • Application Process

The application process includes various factors and if you are a first-time buyer then you need to know this 7-step application process to get the loan.

  • Pass the eligibility test
  • Mention your family status
  • Property valuation and processing fees
  • Documentation and Verification
  • Sanction Letter
  • Property Verification
  • Loan Disbursal

These are the basics of the home loan application and eligibility measure process; there are some factors like your age, monthly income, duration of property, and credit score. If you have these things in check then no one can stop you from buying a home. But, some more factors are required to understand the following aspects. These aspects will help you to get this process done effectively and without any sort of hassle. Based on your financial stability you can go for this loan and the following aspects can help you to go for the best options. These steps become more essential when you are going for a home loan:

  1. Arrange Your Down Payment
  2. Choose Your Lender Carefully
  3. These are some added steps for a Second-time Buyer
  4. Offer the Mandated Documentation to your lender
  5. Keep productive communication with your lender
  6. Manage Loan by going to higher down pay, which decreases the loan amount
  7. Once you have paid your part and completed the payment make sure to have a proper document from your lender stating this.

This article has given a brief glimpse starting from the eligibility quotient to the loan completion priorities. Let your dream come true with this, there are many loopholes and details that one has to read and understand when they are going for a home loan. But, overall this is what a home loan process looks like.