Owning a house is one of the vital goals you aspire to attain in life. It is one of those biggest investments, emotionally and financially. Hence, purchasing a home requires massive financial support. In case you are short of cash or not looking to redeem your investments, a home loan may provide more financial assistance. It is one of the common kinds of loans that individuals may generally borrow from a housing finance company or bank to meet their goal of owning a home. With easy monthly repayments and the option to select the repayment tenure according to your needs, a home loan may prove to be a prudent solution to convert your dream of becoming a homeowner into reality. Note that whether you are looking to avail of a Home Loan in Hyderabad or a Home Loan in Delhi, you must ensure to consider certain factors to get a good deal.
Select a lender that best matches your requirements
Selecting the correct lender for your home loan is extremely important. For instance, when it is to a home loan, it is recommended to go for the best lender willing to provide you with lower interest rates and processing charges. A few of the additional pointers you must use to select the correct lender for your home loan are –
∙ Does the lender have any physical branch where you can visit and meet the branch representatives?
∙ Does the lender’s site disclose their details like a head office and their communication channel like phone, email, etc.?
∙ How many borrowers have the lender served?
∙ What documents will they need to sanction your loan?
Read all the loan-linked documents carefully. Even ever you are in doubt, make sure to ask.
Loan documents are not for any light reading. Paragraph after paragraph of the legalese is printed in very small font. You must ensure to put in your effort and time to read the terms and conditions very carefully to avoid any kind of surprises later. In case you are not able to understand what is written, get the help of a financial advisor or a chartered accountant for the same to understand the agreement well before signing it.
Do not hesitate to ask any questions when you do not understand anything. Do not be shy, and do not hesitate. Understand each point mentioned in your home agreement before signing it. Note that this is just a text; you can simply discuss and negotiate with the lender. It is a legally binding deal, which you must discuss before signing the same because once you sign, the deal is locked, and you cannot suggest any changes.
Do not take on a lot of loans; prioritise investing in assets and not in liabilities much.
A loan is something that must always be availed to invest in assets instead of liabilities. However, a lot of you make the major mistake of availing of loans for unnecessary items, which may push you into a debt trap. To avoid it, you must ensure that the loan you take is for buying assets whose value may increase with time.
You must always make sure that you have a good employment plan that stretches long-term with sufficient cash flow to cover all your loan repayment before availing of the loan. This will assist you in avoiding any future problems linked with loan repayments and even assist prevent putting all your assets at risk.
Make sure that investments conducted with funds from loans are relevant and worthwhile to your financial goals as it will ensure even if something goes wrong, nothing bad may happen as this directly impacts you and those who depend on you. If you already hold multiple loans, a loan against property may be availed to repay all your loan dues and consolidate them in a single, low risk and long-term loan.
Also, it is a great idea to prepay a few loans as fast as possible. Ensure to divert any additional savings and income towards the pre-payment of these loans. Always remember all the benefits linked with availing of loans and gain the maximum tax savings. For instance, if a home is self-occupied, then up to Rs 2 lakh of the interest constituent paid on the home loan may be claimed as a tax deduction. In case the home is used for renting purposes, the whole interest constituent paid may be claimed as a deduction.
Ensure to maximise your earning years to attain financial benefit
It is better if you avail a loan in the starting years of your working career and repay the same over the long repayment tenure than waiting until you reach the mid-level or the later years of your working career. This is particularly true if you are looking to use the loan proceeds to invest in assets like a home or education that can assist you in enhancing your income later.
For instance, suppose Rajan is a 28-year-old guy currently staying in Hyderabad for rent. If Rajan avails the home loan in Hyderabad now at the age of 28 now, he can easily minimise his down payment and maximise his repayment tenure to thirty years as he will still be working at 58 years. It permits him to begin with low EMI repayments for a home loan. Once Rajan gets possession of the home, he can rent it or begin living there and use the previous rent to pay now the home loan EMI. It ensures that Rajan may not just remain free of additional financial stress, but even he can earn from the property appreciation if he upgrades to another bigger home later.
Always keep your spouse as well as your family members informed regarding the financial liabilities and assets
Discuss the loan option with your family members before availing of it. It is important because the loan repayment may impact the family’s finances. Also, ensure to discuss the same with your spouse. When families decide together to invest and attain a financial goal, no one can stop them from attaining this goal.