Everyone wants to have a cheap and nice house. If you are also planning to buy your home and are considering taking a loan for it, then you have to plan how much loan you have to take, what will be the EMI amount, etc. Customers also take loans to buy houses and flats, for construction of plots or for renovation.
What is Home Loan EMI (EMI)?
After taking a home loan, the amount that a customer pays with the bank includes the interest rate and the principal amount, which is called Equal Monthly Installment or EMI.
How do banks decide how much loan customers should get?
If you also want to take a loan to buy a house, then first you have to assess how much your income is. Banks give loans according to your earnings. According to the ease with which you can repay the loan, banks offer the loan amount. That is, your monthly income depends on matters like expenses and income of family members, assets, liabilities and stability in income.
What is the maximum home loan a customer can take?
While buying a house, customers have to make a down payment of 10 to 20 percent of its value. After the down payment, up to 80 to 90 percent of the value of the house, the customer can take a home loan. This price also includes charges such as registration and transfer.
Is a co-applicant required for a home loan?
In most cases, a co-applicant is required for a home loan. Any person from the family of the owner of the house can be a co-applicant. On the other hand, if the house is in the name of two people, then it is necessary to include the names of both in the home loan as well.
How will you get the home loan amount?
The home loan amount is given to the customers in a lump sum or in installments. If you get this in installment, then you will get the full amount in a maximum of three installments. In case of ready-to-move properties, the loan amount can be availed in a lump sum. However, if your property is currently under-construction, the loan amount is disbursed to the customers as per the progress of the construction. In such a situation, the customer can make an agreement with the bank that the amount of home loan should be given to the builder according to the construction.
What documents are required for home loan?
The following documents are required along with the application form for home loan-
Identity Proof
Residential Proof (Aadhar Card, Passport, Driving License, Electricity Bill, Ration Card, etc.)
Proof for age (Aadhar Card, Passport, Driving License, PAN Card, etc.)(Age proof)
Salary Slip
Bank statement for the last six months along with Form 16 or Income Tax return
For this, some institutions also ask for mortgage of life insurance policies, share papers, NSC, mutual funds, bank deposits or other investment documents.
What are the types of interest rate for home loan?
For the interest rate for the loan, you can choose between a fixed rate home loan and a floating rate home loan. On a fixed rate home loan, your EMI does not change for the entire loan tenure. This can prove to be beneficial as interest rates are likely to rise going forward. Whereas in floating rate, the interest rate of your home loan is decided on the basis of the floating rate along with the base rate. In such a situation, the fluctuation of the base rate has an effect on the EMI. This is beneficial when interest rates are expected to come down in the future.
How to decide from which lender you should take a home loan?
If you also want to take a home loan, then let us know that there are many loan options available in the market. Do consider all those options once. You should also pay attention to whether the lending institution is government or private. Along with this, it is also necessary to keep in mind which institution is giving you loan on how much interest and on what terms.
What should I do to pay the EMI on time?
You should save and keep the amount with you as an emergency fund to pay the EMIs on time. This fund can help you in dealing with financial crisis. If something bad happens in your life, like if you lose your job, or you get sick, this fund can come in handy. This will not affect your loan repayment ability.
Can customers close the home loan prematurely?
If the customer wants, then the home loan can be closed even before the completion of its tenure. If customers have opted for floating interest rate, then they will not have to pay any charges. At the same time, in the fixed rate, the bank will charge the customers.
What is the role of CIBIL SCORE for the loan?
Banks check your CIBIL score before giving loan. This gives an idea of your financial capability and allows you to get a loan easily. Therefore, before applying for the loan, get your CIBIL score correct. If there is a delay in repayment of EMI, then our credit score also goes down, due to which it becomes difficult to get loan in future.
What is the Home Loan Amortization Schedule?
Home loan amortization schedule is a table in which all the information related to the loan is available for the convenience of the customers, such as the principal loan amount, loan tenure, interest rate and repayment every year, loan outstanding The amount and the date on which the loan was taken, etc