Skip to main content

Everything You Need To Know About Home Loans

Buying a home is a dream for everyone. With home prices rising exponentially, it has become difficult for buyers to afford a house on their own. A home loan becomes a big facilitator in such a situation. A home loan enables you to afford a house, which otherwise you would tend to miss. 

A Home Loan is a loan taken to acquire a property or to construct a house. Home loans are also available for home repairs, home improvements, and renovations along with addition of a new built-up section to an existing home.

Banks and financial institutions give home loans. You should consider certain factors before zeroing in on a home loan. 

Some of the these factors are discussed here for your reference-
  • Rate of Interest- It is the most crucial factor to consider while taking a home loan. The lower the interest rate, better it is. Lower interest rate reduces your monthly EMI payment, which in turn is pocket friendly for you. A lower interest rate ensures that your payment towards interest is reduced and payment towards principal repayment is increased.
  • Fixed or floating rate of interest- Fixed interest rate is constant whereas floating rate keeps on changing. Fixed interest rate is normally higher than floating rate. Normally, banks offer loan at floating rate of interest.
  • Loan term- You need to decide the time horizon within which you can repay the loan. A loan with a longer tenure will involve higher interest payout. Choose your tenure smartly so that your interest payout is reasonable. Generally, home loans are availed for a tenure up to 20 years depending upon the repayment capacity. 
  • EMI- Your EMI will depend upon the tenure of your loan. Higher the tenure, lower the EMI and vice-versa. Choose an EMI that best suits your pocket.
  • Margin money- Banks often finance app. 80%-85% of the cost of acquisition of property. The purchaser is required to arrange the balance amount on its own. This amount is known as margin money. You should have margin money available once you decide to take a home loan. 
  • Prepayment penalty- There may be times when you have surplus funds in your hands and you want to utilize those funds by depositing them in your loan account over and above your scheduled EMIs. Please check that there is no prepayment charges when going in for a home loan. Many nationalized banks do not charge pre-payment charges these days.
  • Guarantor- Guarantor is a person who undertakes to pay back your loan in case you default in payment. Many banks insist for a guarantor before disbursing home loan. Make sure that you have someone who is willing to become guarantor to your loan.
  • Processing charges- Banks charge certain amount as processing charges to process your home loan. Further, there are charges towards getting the due-diligence of property and legal fees. Some bank also charge administrative charges while disbursing home loan. Inquire from the bank regarding all these charges before proceeding further.          
At legal Dost, we will understand your requirement and then suggest you home loan options best suitable to your objectives. We make the tiresome process of getting a home loan simple for you. We let you concentrate on your dream home, while we do all the paperwork for you.  So be smart and embrace the change the loan industry is witnessing, with Legal dost. Visit today for a quote!
Labels:

Comments

Post a Comment

Popular posts from this blog

Tips to Pick the Right Legal Consultant for Your Business

All successful entrepreneurs need services of legal advisors/ consultants for their business, as they guide  business in  right legal direction, offer right advice on laws applicable to business, enable management to focus on growing the business instead of getting bogged down by legal issues, and bring on table business friendly legal solutions. Bringing the right legal consultant on board is  very important, and when it comes to legal matters one should aim to associate with professional offering good quality of work rather than those offering work at low cost.  One should hire a sound professional legal consultant as brings along many advantages some of which, are listed below- The legal consultant can advise on the right type of company organization depending upon business and operational requirements. They provide custom corporate compliance services as per the type of company (LLP, private limited, one person, etc.). T hey can prepare employm...
Post a Comment
Read more

Setting up an Indian Subsidiary

Foreign companies can establish their business presence in India by setting up a wholly owned Indian Subsidiary. Indian Subsidiary is the local entity of foreign company for doing business in India.  Indian Subsidiary is incorporated as a wholly owned subsidiary of parent foreign company.. The parent foreign company holds 100% shareholding in the Indian Subsidiary. Remittance received by Indian Subsidiary from foreign company is subject to Foreign Direct Investment (FDI) guidelines issued by the Government of India.   Incorporating a private limited company is a preferred choice for setting up an Indian subsidiary. Various global foreign companies operate in India through their Indian Subsidiaries, which in turn are fully owned by the foreign companies .  To setup an Indian Subsidiary following are some of the requirements: • At least 2 members are required • Minimum paid up capital required is Rs. 1 lakh • Minimum 2 directors are required, of which...
Post a Comment
Read more