A home loan is called a ‘good’ loan because it helps you acquire a tangible asset that can appreciate over the long-term. Home loan interest rates are still at an all-time low – starting at 6.75%, making it a delight for new home buyers. A home is an asset that changes an individual’s social as well as financial recognition. However, a home is a huge investment and it takes years of financial commitment. To make it easier, a home loan plays a huge role in the lives of aspiring home buyers.
A home loan is one of the highest valued loans, where the principal loan amount can exceed crores. This means it is a long-term financial commitment and takes up a good percentage of your monthly income. If this is the first time you are looking for a home loan, you need to understand a few essentials about a home loan. Home loan strategies for first-time buyers will differ in person, and it will be helpful if you follow a few tricks and tips. Here are some of the best strategies to ensure your borrowing experience turns out to be as beautiful as your dream home:
Decide your EMI right:
Homebuyers should always check their Equated Monthly Instalments affordability while choosing a loan repayment tenure, and factor in their repayment capacity and monthly contributions towards crucial financial goals. It is important to judge the capacity of repayment and only then decide on the right EMI amount. Do not go for a huge amount of money if you are not able to pay for it. Choose a low EMI if your income is low. A long-term loan is good to keep your EMI under control. This will not put any kind of burden on you.
Check your credit score:
A credit score is an important aspect when dealing with a home loan. If you have a good credit score, it will become easier for you to get an affordable home loan. An affordable home loan is one that comes with a low rate of interest. The lower the rate of interest, the better the home loan will be. An affordable home loan with a low rate of interest and minimal charges will make it easy for you to repay. Always check your credit score before you apply. If you find your credit score between the fair and bad range, you should not apply for a home loan or house renovation loan. Once you improve it to 750 and above, you are good to go.
Take a joint home loan:
A joint home loan will be an easy one to get. When the home loan burden is shared between the partners that earn, the loan provider will easily offer you a loan. If your partner is earning well and has good credit eligibility, you can go for a joint home loan. This will reduce your burden and you can also get an easy approval along with a low rate of interest.
Opt for a long-term loan
A home loan is a high-value loan because the principal loan amount is always high. You must opt for a long-term loan so that the EMI is low and there is no burden on you. Once you choose a long-term, the EMI will decrease. It will help you get a low EMI for a few months, and you can easily pay one. A short-term loan will always have high EMI to pay, which may become an issue later on. It will be helpful for you to manage all your expenses and quickly meet your home loan amount too.
Choose the right property:
A good property is always the best way to get a home loan approval. If you need a home loan, you need to convince the loan provider. You can do it with a reputable property. A property with a good-reputed builder and a good location can be easy for a loan provider to get a home loan. A loan provider can easily recover the home loan amount by selling the property, if defaulted. It will help you get an easy approval along with a low rate of interest.
Make a high down payment:
The more you pay as a down payment, the lower the burden will be. A low-burden loan will help you easily recover the repayment without any hesitation. So, try and make a down payment so that your EMI amount is low every month. Read More: Apply for zero down payment bike loan in India
Get a low rate:
A low rate of interest is always the best way to get an affordable home loan. A home loan is a long-term loan, and it goes on for years. You need to settle down at a low rate or else it will become a huge burden for years to come.
A home loan is the best way to buy a new home in a short period of time with a healthy credit score. If you need to renovate your home, you can use a house renovation loan.