Everyone wants to buy a dream home but not all of them can do it. There was a time when buying a house was extremely difficult. However, after the introduction of the home loan, things have become much easier. You simply need to select a property and the bank will loan you the amount to buy it. You will need to repay the loan in 20 to 30 years in the form of monthly instalments. A lot of people wonder how to get the home loan. Sometimes they are completely stranded. If you are looking to buy a house, here are a few things you would want to keep in mind to get a home loan.
Begin on the Internet
The good thing is that all the financial institutions that offer home loans also have websites. You can get a lot of information regarding the home loan and its procedures on the websites. You will also get to learn a great deal about different options available. Once you are educated, you will be more comfortable with the overall process of home loans. Remember that banks are always willing to offer you home loan. Therefore, speak to as many of them as possible.
Things to Consider
Banks usually come up with enticing promotions offering great discounts on the interest rate. Do not get caught in the trap as there may be certain things in the fine prints that will increase the price in the end. Most of us do not bother to read the fine prints and hence miss the important points. Even when we read it we do not understand it completely. The simplest way to figure out if the offer is any good or not is by looking at the EMI. The bank which is offering the lowest EMI is the one you should do business with – as simple as that.
Calculating EMI : Most of the banks have the EMI calculator app on their websites. In the calculator, you need to provide certain details including amount of loan, interest rate, and the tenure. You will get the monthly instalments you will need to pay. You can easily figure out your EMI with the help of the calculator. It will also help you choose the tenure. For instance, if you want a loan for certain amount and you know your monthly repayment limit, you can choose the tenure accordingly.
Interest Rates : Different tenures have different interest rate. The longer the tenure higher will be the interest rate. The short-term home loans usually have the lowest interest rates.
There are two types of interest rates you can go for – floating or fixed.
If you have opted for floating interest rate, the interest rate on your home loan will decrease or increase at any particular time depending upon the market rate at that time. So, you will benefit if the interest rates go down. On the other hand, you will be at a loss if they increase. Fixed interest rate, as the name suggests, offers fixed rate throughout the tenure of the loan despite the current market trend.