With vacations and festivities in the corner, it is generally observed in this period, that there is a sudden surge in the real estate market. Not only from the buyers’ share in the entire property market, there is a good demand for lenders and developers. If you are one of the buyers then make sure that you do not get carried away by the lucrative deals and offers shone in front of you.
Do not choose your lender first
In order to calculate whether your finances will be enough to make you a loaner, most people opt to go their lenders to find out about their eligibility, in most cases, they are doped, since the lenders always look for making more money. You can do a small homework at home by summing your and your spouse’s annual compensation and multiply by 4. That should give you an approximate amount of how much of a loan amount you are eligible for. It is not wrong to first assure what amount you can secure as a loan before citing your house but this can be done by yourself. Just follow the above steps to get a rough idea.
Down payment calculation
Here, without any exception, all lenders require you to pay the down payment in a single installment before the property is handed over. Generally, people assume that they can pay the down payment amount proportionately while the bank finances the rest.
Avoid Window shopping
The best way you can get your right choice of your lender is to bargain. Try to shortlist at least 3 or 4 banks who are good enough to provide you with the required loan amount. It is always advisable to bargain regarding the interest rates, EMIs etc. Since, apart from your income and payment structure potential, your negotiation skills will also be considered. And as a prudent loaner, get all the information about the processing fees, legal charges, and other hidden costs before deciding on the loan amount.
Teaser loans
Do not fall for teaser loans. They generally reduce the rate of interest on your loan either for a year or for the initial years of your debt. You have to analyze when the banks shift from this reduced offer of interest rate to the floating rate, what impact will it make on your finances. For example SBI offers State Bank home loan scheme provides home loans at 8%- at least for the first year. This rate of interest, will eventually change to the floating interest after a year.
Insure your home loan!
I hope you know about this magic option. By insuring your home loan with a life insurance and a critical illness policy you can benefit your family members with a home and not a home loan. In case of the death of the borrower, the life insurance cover can provide the family with a monetary cover so that they can benefit, not the home loan but definitely the home. And for the critical illness policy, if in case the borrower is not able to earn due to any critical illness say, heart stroke, kidney failure etc, this policy will provide financial assistance wherein the interest amounts can be paid.