My Dream Home! Haven’t we heard a lot of people saying this? Well, we don’t know how many people make their dream come true but seeking a right home loan is indeed a smart way to get things started. Over the years, the procedures to get a loan have gone through a tremendous change with increasing competition among various public, private banks, and housing finance corporations; the end result being extremely easy & convenient home loans being made accessible to one and all.
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The Standard Operating Procedure
There are many lenders in the market which offers you freebies and entice you to take a home loan from them; however, you should be aware of their tactics. Being well-read and informed in advance will prepare you to manage your loan. You can analyze some key points online and then come to a conclusion. We will guide you and take you through the entire process while choosing one.
Comparing the interest rates online is considered to be the prime and foremost procedure. There are various helpful resources through which you can check current home loan interest rates offered. Because there are various lenders which offer you a lower interest rate for initial years and then they upscale it substantially. Don’t fall into such traps. You must always compare the long term interest rates for about 15-20 years and then go with the lowest rate.
Loan amount Eligibility
Your eligibility criteria encircle things like your age, job, current salary status, and past credit history. The loan amount will depend on the monthly salary you are withdrawing and the property you’ve selected. On analyzing this, you can get around 80-85% of the loan amount initially.
Documents for loan approval
The loan application form gives a checklist of documents which needs to be attached with it, along with your recent photograph. In addition to all the legal documents related to the purchase of your house, the bank will also ask you to submit your identity proof, residence proof, Form 16 or income tax return, and salary slip. The salary slip must be authenticated by the employer and self-attested by you. Some lenders may also ask you for collateral security like mutual funds, insurance policy or any bank deposits. Once you selected the bank offering lowest interest rates and other factors, submit the home loan application to bank online.
Migration: Think twice
People look to transfer their home loans to another lender or bank where they see interest rates lower than their current rate. But we want to tell you that unless the rate is not significantly lower, it doesn’t make any sense. If the rate is at least 0.50% lower in comparison to the present, one should consider shifting then. Otherwise, it would become problematic for you running between different lenders and loads of paperwork. Most lenders will also levy foreclosure charges that defeat the purpose of refinance. That’s why we prefer you to check and compare the interest rates online.
There will be a field investigation by Bank executive after your home loan application is evaluated, as they want to verify your office and residential address and validate the documents submitted by you. There are chances that lender can reject your application at this stage if they found any discrepancy in your credit history or in an application.
Hope this information was helpful to get an understanding on home loan!