What are the things you should keep in mind while taking a home loans?

Posted by Shubham Housing Development Finance Company Ltd. on May 11th, 2022

The loan amount also depends on the tenure of the home loan and the rate of interest. Apart from this, banks also fix the upper age limit for the loan.

What are the things you should keep in mind while taking a home loans?

Generally, you take a home loan for the purchase of a house/flat, plot, or construction/renovation. Many times, home loans are also taken for the enhancement or repair of the house. Here we are giving you all the necessary information about the home loans.

How much loan can you take?

Before starting the process of a housing loans, assess how much you earn and how much loan banks can give according to that. Your ability to take a home loan depends on your ability to repay it. It depends on your monthly income, expenses, and family income, assets, liabilities, stability in income.

Banks first see whether you will be able to repay the home loan on time or not. The more money you have in hand every month, the more your home loan amount will increase. Usually, a bank or lending company sees whether you will be able to give 50 percent of the monthly income as a home loan installment or not.

The loan amount also depends on the tenure of the home loan and the rate of interest. Apart from this, banks also fix the upper age limit for a home loan. If you want to repay the home loan fast, then these tips will be very useful for you. 

What is the maximum home loan you can take?

• A down payment of 10 -20 percent of the cost of a house or flat has to be made. This is your contribution.
• After this, the loan is available for up to 80-90 percent of the value of the property. It also includes charges like registration, transfer, and stamp duty.
• Even if the lending institution approves you of a higher amount as a home loan, you don\'t need to take the entire amount as a loan.
• While buying a property, you should make a maximum down payment so that the loan burden is minimal. Keep in mind that the home loan lender charges you a lot of interest over a long period.

Is it necessary to apply for a home loans?

Yes, a co-applicant is necessary in most cases. If the property is in the name of two people, then in that case both of them must participate in the loan against property as well. If you are the owner of the property, then any person from your family can be the applicant.

What are the documents required for home loan approval?

A checklist of documents to be attached is included in the home loans application form itself. Along with this, you have to put a photo.

For legal documents to buy the house, the bank has to give you the salary slip (office attested and self-attested) along with the identity and residence proof and the bank statement for the last six months along with Form 16 or Income Tax Return. Some home loan institutions also ask for life insurance policies, share papers, NSCs, mutual fund units, bank deposits, or other investment papers as a pledge.

What is Home Loans Sanction and Issuance?

• According to the papers given by you, the banks decide whether to give you the loan or not. The amount of a home loan also depends on this.
• If the bank has accepted your application and has decided to grant a home loan accordingly, then the sanction letter contains information about the home loan amount, tenure and interest rates, etc. It also contains information about the terms and conditions of the loan.
• When the loan amount is actually in your hands, it is called disbursement. This happens after the technical, legal, and valuation-related process is completed.
• You can decide to take a loan less than the amount in the sanction letter. At the time of getting the loan, you have to provide an allotment letter, photocopy of the title deed, sale agreement, and encumbrance certificate.
• From the day the loan amount arrived in your hand, interest is charged on it.