Home loans are handy ensuring that you own a home even if you do not have all the money at ago.The design of home loans is very friendly to the homeowner. It may however not be an easy thing for you to take a home loan. You will need to consider some factors before you take a home loan. Some of the most relevant are described below.
Of utmost importance are factors that affect eligibility criteria.To estimate your eligibility, you can calculate your EMI.The borrowers income will be used so as to get a 40 percentage of the same. Another consideration is the credit history of the borrower.A poor credit score will get you a lower loan.Those with a better credit score will easily get a loan than those who have a poor credit score. These people who will easily access a loan are those with a stable income and a better credit history as shown by the credit score.Also, you may consider a co-applicant since it makes the loan application to sail through even faster.
Again, it is great to ensure you know what needs to be known about your type of loan. In normal circumstances, banks will use either of two interest types as they offer loans. The floating interest type and the fixed interest type are the two types of interests. Throughout the loan period, there will be a fixed EMI to by paid by the borrower in a fixed interest type. Floating interest types are however different. The EMI is affected by market conditions changing the interest.
It is prudent also consider the rate of interest. As you resolve to take any home loan, be sure to negotiate. You will see a bank give you some considerations if you are a return customer. This is even easier if you have a savings account with the bank. Again, a clean credit history is an added advantage.Again, applying for the loan around the end of the month is better since banks have targets they must get. A bank officer whose target is not met may find it more appealing to give you the loan so that they boost their target.
Paying close attention to the fine print is also needful. Everything pertaining to the loan is in this document.When you read the fine print, you will marvel at the number of clauses therein. Much is hidden in this document and you need to read it to know.Before you sign the dotted line, be sure to have read all the clauses in the document. The hidden charges, the penalty fee, loan processing fees, service charges and other charges are things that must be clear to you.