10 things to know before taking a home loan

10 things to know before taking a home loan

A home loan is a good option for buying a house because if 20 to 30 lakh rupees are saved together, and then the house is bought, then it becomes less. In doing this people’s whole life will be lost, and they will not be able to live in their own dream houses.

Save 20 to 30 lakh rupees and then buy a house, it is much more difficult than you take a loan of 20 to 30 lakhs and keep paying 15 to 20 thousand monthly installments.

10 things to know before taking a home loan

A home loan is a better option for most servants, small traders, and shopkeepers so that you buy the house of their dreams.

Buying a home is a great opportunity on the one hand to buy the house of your dreams, but on the other, it is also a headache.

You have taken a loan of 20 to 30 lakh rupees from the bank and started living in your own house, but now a responsibility has come on you, Every month you have to pay your monthly installment. Apart from this, you are not the owner of the house until the bank loan is in full.

If you are not able to pay the loan, then the bank takes possession of your house, and whatever loan money you have paid till now will go in vain.

Therefore, before getting a home loan, some things must be taken care of, which we tell you in this post.

What are the types of home loans?

Based on purchase and construction, mainly we can take a loan for three things related to the house. To buy a house, build a house, and repair a house, so we can say that there are three types of home loans.

1. To buy a house (home purchase loan)

You can buy a built house by taking a home loan or buy a plot to build a house. From whomever we buy a ready-made house or a plot to build a house, the bank makes a check-in its name and gives you a loan by keeping the original documents of the registry.

2. Home construction loan

If you already have the plot to build a house, then you can get it constructed by taking a construction loan from the bank. The bank gives home construction loans as per square fit at Rs 1200. 

The bank gives money for installments, as soon as your house gets built, the bank gives you the installment of your loan. You can use this loan only for the construction of a house.

3. To get the house repaired

If your house is already built then you can take a home loan for repair to build any other part of the house 

If you take a mortgage loan after the house is built, then you take it for your business. A mortgage loan does not come in the type of home loan because you neither buy the house nor build it, but you take a loan on the house built. Its interest rate is higher than the interest rate of a home loan.

Is a home loan a secured loan or an unsecured loan?

A home loan is a secured loan because when you take the loan, the bank keeps the original documents of your registry as a pledge. Your registry remains with the bank until you repay the loan in full.

Till the time you have not repaid your loan, the bank is the real owner of your house.

If you are not able to repay the home loan money, the bank takes ownership of your home. Then if the bank wants, it can sell your house to anyone and recover its money.

Look for a Low-Interest Rate

Whatever banks and finance companies provide home loans, there is definitely some difference in their interest rates. If we talk about home loans, then their duration goes long.
Due to this, the different interest rate of 0.05% makes a difference of lakhs of rupees in the long run loans are for 20 to 30 years.

Therefore, before taking a home loan, it is necessary that you once find out in all the banks which bank is giving you the lowest interest rate loan. The bank which gives you the lowest interest rate loan, should give more importance to it and get your loan from that.

Before finalizing the property, apply for a home loan

If you finalize the property at someplace and give some token money for it, and then apply for a home loan. In such a situation, problems may arise for you if a loan is rejected.

Therefore, it is important that if you are buying a property through a home loan, you should apply for the loan before finalizing the deal for the property.

Take a joint home loan if your income is less

When you go for a home loan, and if your income is sitting low for your loan installment, then you can add other family members to their income by making them a participant in the loan.

By taking a joint home loan by including the members of your household in the loan, you can also show more of your income for the loan. Also, all loan participants can avail of tax exemption by availing of the loan.

You work in another city, and you can get a home loan in any other city.

It is quite possible that if you work in Bhopal and you buy a house or plot in Indore, you can get a home loan for that.

How to get a subsidy in a home loan

Loans are taken by the Government of India to buy or build your first house and get a rebate of up to Rs 2.67 lakh. There are some terms and conditions for this exemption such as the house you take a loan to build or buy must be your first home.

The registry of the house should be in the name of the woman, the woman should not already be the owner of any other house. This subsidy given by the Government of India on home loans was for a limited time, but its period has been extended to the last date 31 March 2022.

Make the woman an applicant, get exemption in an interest rate and other benefits

If you make a woman the main applicant for the home loan, then you can take advantage of additional discounts on the interest rate and other offers.

Many banks give special offers and discounts on interest rates for women in home loans.

Even a few points reductions in the interest rate of the home loan can make a profit of lakhs of rupees in the long run

Before taking a loan, find out in the banks that if the application is made in the name of the woman, then what additional benefits can the bank give you in this.

You can choose the loan according to your budget

Since a home loan runs for a long period, 15 to 20 years, so choose it with great patience. You should choose your loan keeping in mind your small and big expenses like children’s education, children’s marriage, and other big expenses coming in the next 15 to 20 years.

Be sure to check the terms and conditions of the bank

Will the interest rate be floating or fixed?

While finalizing your loan, also keep in mind that if your loan is floating i.e. RBI changes the home loan interest rate, then the interest rate of your loan may also change.

If your interest rate is fixed, then your interest rate will remain the same as long as your loan lasts.

BULK PAYMENT / BULK PART PAYMENT

Apart from whatever monthly installment of your home loan goes, if you have money coming from somewhere in bulk at once, then you can deposit money in bulk, then what are its terms and conditions.

You can make a bulk payment or part payment in addition to your monthly installment. The bank will not charge any separate charges, etc., and also take information about it.

You should ensure that the bank accepts the part payment and does not charge any extra for the same, you go for the loan with the same bank.

Foreclose charge

As long as your loan lasts, your shoulder remains an obligation to make full repayment of the loan. If you run a home loan for 20 years, then in that time you pay the same amount of loan money as an interest to the bank.

If you took a loan of 20 years and made two or four-part payments in between, now you can reduce your monthly installment or your loan tenure gets reduced.

If the entire amount outstanding with you is arranged from somewhere, then you want to get rid of it by paying the loan in full.

If you pay the entire loan outstanding before the completion of the loan tenure, then it is called foreclose i.e. paying off the entire loan before the completion of the loan tenure.

You should also ensure that your bank does not charge any extra for foreclosure.

File and other additional charges

You gathered information from some banks before taking a home loan, and according to that, you are getting a loan at the same rate of interest in almost all the banks. Then in this situation, you must compare the file and other charges once.

Before getting your home loan, you must compare the file charges and other additional charges of the banks. By doing this you can save some of your money.

If any of your friends or relative is thinking about a home loan, then definitely share this post with him so that he can get the necessary information before taking the loan. You can ask your other questions regarding home loans by writing to us in the comment box.

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