Having a house of one’s own is just the quintessential requirement and desire for every other Indian here. The absolute sense of fulfillment and accomplishment that comes with purchasing an independent house is next to none. Where you must be dreaming of owning a home of your own at some point of time in your life, you must also be aware of the perks of being a house owner altogether. But, dreaming clouds often seem approachable in that limited dimension. Still, the real blow comes that shatters your hopes and desires of owning a house of your own. Where does that blow come from? Quite a no-brainer as it should be, it is the finances that come down to shattering your peaceful dreams of buying the long-time aspired house for yourself. But, in the end, everything in this world has a solution of some type. In this case, of not accumulating enough finances to support your purchase of a house wholly, home loans turn out to be the savior for many customers.
Don’t worry, and you are not alone. If you do not trust bare words, let us substantiate it with proven figures. Around 3.3% of the Indian population from urban areas tend to take home loans. Although the percentage might seem a small number, it covers over three lakhs of people altogether.
Before we begin talking about ho
w to get a home loan for oneself, let us see what a home loan is and its benefits.
What is a Home Loan?
A home/housing loan often referred to as a mortgage, is a sum owed by a client from a bank or other lending institution. The borrower is supposed to repay the loan principal and interest in Easy Monthly Instalments, or better called EMIs, over a duration of time that can range anywhere between10 to 30 years, consequently depending on the existing loan type.
What Are The Benefits Of Sanctioning a Home Loan?
- Interest Rates are low- What can be a better benefit than this? People often tend to sanction loans but pay way more than the principal amount because of the high-interest rates. There might even be cases where the individual might not be able to repay the loan at all because of such high-interest rates that keep on adding to your principal amount annually and might end up losing the house that it purchased. Thus, the result is a disappointing NIL. But, in cases of home loans, interest rates are intentionally made to keep low so that borrowers are not burdened with repayment concerns all through their life.
- Repayment is a trifling job- Unlike the most excruciating ways of repaying loans sanctioned, you can pay home loans back quickly every month or in installments. Usually, the refunded amount is deducted from the individual monthly salary and is less than the credit amount. That way, you do not have to bear the brunt of a constipated expense. Thus, it makes it easier for the borrower to make the repayment in a matter of months. Can choose The time for repayment on the exact parameters of your monthly deductions as to when the total amount will be to the borrowed principal and compounded interests.
- You get Tax Benefits- Lie or not, income tax is real torture sometimes. But, with home loans, you are liable to be exempted from certain tax payments. The government’s revenue level is decreasing since interest paid is reduced from the total outlay of tax revenue. Just as amazing as it sounds, right?
Eligibility Criteria for a Home Loan
Following is the list of eligibility applicable to individuals heading forth to take home loans:
- Applicants’ ages must be anywhere between 18 to 60 years.
- You must be a paid or self-employed worker with a regular income.
- You must earn more than the bank’s minimum income demand.
Documents Required for Home Loan Application
The sanctioning of loans also includes paperwork. The documents that must submit are listed below:
- A completed and acknowledged application form, as well as a photograph, must be supplied.
- In most cases, evidence of identification and address is required. You can use anything like your PAN Card as proof of identity and a copy of your passport/license driver or any recent electricity bill as evidence of address.
- For the transaction charge, write a check.
- Financial records from the prior six months are required.
Different Types of Home Loans
- Fixed Interest Rate Home Loan- A fixed mortgage loan is one in which the interest rate is set for the duration of the loan. This indicates that even though significant changes in the economy, interest rates are reluctant to affect them.
- Floating Interest Rate Homes Loan- A variable interest percentage home loan is one in which the interest rate changes depending on market circumstances.
- Implies that financial rates might rise or fall based on market conditions.
There Are Certain Things To Remember While Applying For a Loan.
- Borrowing Capacity- Just like the proverb goes, not to spread your legs beyond the mat, you should ideally not go out of your way to sanction a loan for yourself. In the end, if you somehow fail to repay the loan borrowed, you might be in a challenging position to deal with. You should keep in mind the monthly budget of your house, including expenses for everything, and chalk out a contracted budget that would suffice your needs for the coming months when your credits will be deducted partially for loan repayment.
- Loan Duration- Yet another checkbox to be ticked while heading forth to borrow a loan is calculating the tenure of the loan. There are various loans available that vary in terms of duration, ranging from three to thirty years. Hence, depending upon your income and capability to repay the loan will help you choose what duration time will suit you best and let you repay the loan at ease.
- Terms and Conditions of the Loan- Unlike always blindly accepting the terms and conditions of your apps and features, home loans are way different. The borrowers are expected to be more mindful and conscious of what they are heading to borrow and on what terms. Because there are times when lenders add words that might end up putting you in a challenging situation later on, and you would not have the slightest idea about it. Hence, prevention is better than facing things.
Thus, keeping the things mentioned above in mind, one can successfully get a home loan sanctioned and head to make the house of their dreams.