Home loan is usually the first thing on mind of almost every home buyer as the amount involved in the home buying procedure is not small that one can deposit. So, be cautious about getting a home loan sanctioned as the minor mistakes made in the loan application process can turn your financial condition upside down. So, go through the below-mentioned points and learn about the mistakes that can hamper your home loan application:
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1. Availability of Insufficient Funds
The banks usually offer a home loan up to 80 percent of the property value and the rest depends upon the CIBIL score and the applicant’s income as it let the lender know a person’s ability to repay the loan amount. The disbursal of 80% loan means that the home buyer has to make 20% contribution for the purpose of property buying. This contribution is also known as the down payment or the token money which is made to initialize the deal. Firstly, the home buyer is required to deposit this 20% after which the lender alias bank starts the process of loan disbursal. So, if you plan to buy a home then we suggest you channelize money for down payment as it is a crucial part of the entire deal.
2. Making Application for a Larger Amount of Loan
The real experts suggest opting for a home loan which fits into your budget. Compare the home loan rate and duration of various banks and choose the one which offers maximum amount with moderate repayment duration and budget-friendly EMIs. This is so because selecting a home loan with high EMIs and small duration can make you face a financial dilemma for example not getting increment as per the expectations and the uprising of sudden expenses can also work as a burden on you. So, choose a home loan that offers you an easy repayment option that too in a moderate duration.
3. Choosing a Wrong Loan Option
Home loans are of various types and the lender tries to sell off all kind of products to the home buyers. But, act smart and don’t opt for any housing loan without having proper knowledge of the same in order to avail maximum benefits. So, instead of opting for a wrong option take a look at floating rate home loans, fixed rate loans, semi-fixed rate loans, a home loan with overdraft benefits, incremental EMI home loans and others. The process is simple. Look at the budget and the type of property you wish to own. These are two parameters to find out which home loan product suits you the best.
4. Availing Loan for Short Duration
A home loan is offered by the banks for a period of 20 years usually although it also depends up the remaining years of service and the income. But, you the home buyer must not avail home loan for a short tenure as the EMIs, in this case, are higher than normal. So, avoid availing a home loan for short period of time as the loan in a longer duration helps you pay less on a monthly basis which is good as you can make a bit of saving while repaying a loan. Remember that failing to repay the loan will make you accountable for extra payment of penalties which can burn a hole in your pocket. So, take a loan by acting smart and pay it wisely.
5. Not Making Comparisons
It is the most common mistake that many home buyers make. Instead of being happy about getting a home loan sanctioned without many issues we suggest you compare a couple of banks loan product as it will give a clear picture about which loan is best of to avail.
6. Non-Maintenance of CIBIL Score
Pay the credit card bills on time as they reflect in the CIBIL score. So, instead of making payments with a late fee, pay the bills on time as they help you lead a good CIBIL score.
7. Checking Details of Home Loan Agreement
Most of the times home buyers take the home loan file back home without checking the details mentioned there. So, inspite of doing such thing, take time and read the details loan agreement in detail as it allows you know what exactly you have to pay in how many months.
