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Home loans are a long-term commitment, so you should have full clarity on the terms and conditions of the loan before you apply. This will enable you to better understand whether the loan is right for you, and will help you save time and money when you apply.
When you're ready to apply for a home loan, there are a few questions you should ask your loan provider first. This will help you narrow down which home loans are the best fit for your financial goals and needs. It will also save you a lot of time and energy if you can get answers to some of the most common questions right away. This guide will teach you the most common questions to ask your home loan provider when applying for a home loan.
Q.1: What Types Of Home Loans Are Available From Banks, And Which One Would Be The Best Fit For You?
The home loans offered by a bank will vary based on the home loan scheme that the bank has chosen to offer. Typically, a bank will offer a variety of home loan schemes, such as fixed or adjustable rate, or purchase or refinancing.
The different home loan schemes vary depending on the purpose of the loan, such as purchasing a home, refinancing, or investing in property. This may require a little bit of research, but it will help you narrow down which home loans are the best fit for you.
Q.2: How Do You Determine My Home Loan Eligibility?
When you apply for a home loan, your loan provider will determine your home loan eligibility to apply for the loan. This will often involve verifying your income, assets, and liabilities. The eligibility requirements will depend on the home loan scheme that the bank has chosen to offer, but typically your eligibility will be determined based on your income, assets, and liabilities.
Typically, the eligibility criteria used to determine your eligibility for a home loan will be outlined in your home loan offer. However, if you have any questions or concerns, the loan provider should be able to provide you with additional information. This helps you understand where you stand and if needed, you can offer additional information to help you qualify for the home loan.
Q.3: How Credit Score Affects My Home Loan Eligibility?
Your credit score is one of the most important factors in determining your home loan eligibility. The higher your credit score, the more likely you are to be eligible for some of the best interest rates. Ideally, a credit score of 750 and above can get you the best loans, while a score of less than 650 is considered bad. If your credit score is lower than what is required for the loan, you may be eligible for a different home loan scheme. This is why it's important to understand the minimum credit score requirements for each home loan scheme.
Q.4: What Are The Interest Rate Options Offered? Fixed Or Floating?
Fixed-rate home loans offer a steady and predictable monthly payment throughout the life of the loan. This is a great option if you want to be able to budget for your monthly home loan repayments. On the other hand, adjustable-rate home loans offer the benefit of potentially lower interest rates at the outset. This is a good option if you are willing to put up with the uncertainty of potentially higher interest rates in the future.
Q.5: What Is The Maximum Tenure Offered On My Home Loan?
The maximum tenure offered on your home loan will depend on the home loan scheme that the bank has chosen to offer. Typically, a home loan will offer a maximum tenure of 30 years, which helps you plan for the long-term affordability of your home, and also avoid the potential risk of refinancing when the tenure is up. It also helps you avoid the potential risk of refinancing when the tenure is up.
Q.6: Are There Any Processing Fees On My Home Loan?
Typically, a home loan will have a processing fee of around 3%, which is a small fee to help cover the cost of the loan processing. It is worth noting that the home loan provider may also charge pre-closure charges and part-payment fees if you choose to close out your home loan prior to the agreed upon maturity date. These fees are sometimes waived off as part of special offers. Be on the lookout for such offers.
Q.7: Can I Pre-Close My Home Loan? Are There Any Charges For Pre-Closure?
As per latest RBI guidelines, bankers cannot charge pre-closure fees on floating rate of interest loans. Most bankers also allow part payments on home loans once you complete a specific number of EMIs. These part payments are very beneficial in reducing your overall interest burden. Confirm these particulars with the banker before you sign the loan agreement.
Q.8: Can I Add A Co-Applicant On My Home Loan?
Home loans are generally offered jointly and you can add another member of the family on the home loan. It is better if the co-applicant is also an earning member so that you have better chances of loan approval.
Q.9: What Are The Documents Required To Apply For The Home Loan?
Get a complete list of documents required. Sale deeds, property documents, your personal documents like ID proof, address proof, bank documents, employment details, and more are required for loan approval. Ensure that you have submitted all the required documents so that your loan is approved without any delay.
Q.10: What Are The Costs Covered In My Home Loan?
Your home loan not just covers the cost of the property, it even covers registration costs, property insurance, interior work, and other expenses. This differs from lender to lender. So talk to your lender and find out what costs you can include in your home loan amount. This is a great way to get a high loan amount at low interest rates.
Q.11: What Portion Of The Home Loan Should I Bear?
You do know that lenders don't offer 100% of the property cost as loan, right? Most lenders in India offer a maximum of 80% of the property cost as home loan. You have to bear the remaining. You also need to shell out various other charges like processing fees, mortgage costs, documentation charges, and other miscellaneous charges. Find out how much these costs will be so that you can plan accordingly.
Q.12: What Other Features Or Benefits Do I Get With This Home Loan?
Home loan is a very comprehensive product. Lenders add many features and benefits to their loans in order to attract more customers. Some lenders offer free life insurance, while some offer interest free moratorium for a certain period of time. Don't shy away from asking about these offers and availing them with your home loan. They go a long way in making your home loan a better deal.
Conclusion
Your home loan experience is largely determined by your lender’s mortgage process. This becomes crucial when considering the costs involved. Your mission, if you choose to accept it, is to familiarize yourself with as many products and offers as you can in order to get the best one possible.
We should be assertive and ask for all the information that we need. This will ensure our home loan application goes through with minimum hassles.
FAQs of Questions to Ask Your Home Loan Provider Before Applying for a Home Loan:
1:What are the types of home loans available in the market?
One can get home loans for the purchase of a built or under construction property. Also to buy a residential plot or to construct a house on an already purchased plot of land.
2:Can I get a home loan to renovate my existing property?
Yes, there are also home renovation loans for that.
3:Why should I ask all these questions to the lender before applying for a home loan?
Asking all these questions gives you more information and the clarity to choose the best home loan for your needs.
4:What if the lender doesn’t answer any of these questions relating to my home loan?
The lender is accountable and responsible to answer any and all questions you might have. They cannot deny answers to any of your valid questions.
5:Will the lender let me know the EMI amount before I accept the home loan?
Yes, you can ask the lender for the approximate EMI amount before accepting the loan. You can also use our Home Loan EMI Calculator to find out the tentative EMI based on your loan amount, tenure and interest rate. It is very simple to use.