Home Loan Guide for First Time Home Buyers in India

It is quite a common thing to look for a home loan when you decide to purchase a home. Generally at the age of 30, you would need financial support to purchase a home. That is how a home loan has gained so much importance. Everyone has the wish to own a home at some point in time. Considering rising expenses, it is difficult to save enough to purchase a home without any support. To ease off your purchase and buy a home, you go for a home loan. A home loan is a fixed obligation for a long period and it takes a good part of your income. This guide will help you and guide you to make a better decision before you go for such a huge debt. In simple language learn how a home loan works and what suits you the best.

What is a home loan?

A home loan comes along with a rigid end-use, and it is meant to meet your home purchase specifically. You cannot use the fund for anything else. The bank or financial institutions directly does the transfer to your home dealer. You need to do the down payment and the rest of the amount goes as debt, for which you pay easy EMI monthly to pay back. A home loan comes with proper documentation, an eligibility check, and a rate of interest.

How to take a home loan?

Check your credit score: Those three digits should not be ignored if you are willing to go for a home loan. A credit score is very important for loan providers to check before they offer you a huge amount of debt. This score tells about your credit health and how you have handled your finances in the past. It has a lot of power, as a bad score can get you an instant rejection. A home loan is not easy to get because it needs a good amount of money. A loan provider will look for a good score, so start building that if you doesn’t have one. For the ones with a good score, you are good to go.

Check eligibility criteria: A credit score is a foremost thing that is checked by the loan provider. However, that is not only the one thing that matters. Things like income, job stability, and age, property, and bank details are also seen before you get approval. You need to work on various aspects to get approval. Any risk linked to you can make you fall into trouble. If any instance hints the loan provider about any kind of risk, he will take a back and may not offer you approval.

Look for a loan provider: When you know you are eligible, it is time for you to look for a loan provider. That will be easy as the market is filled with various financial institutions. However, out of so many options, you cannot settle for one without a good comparison done. You need to shop around enough to know the best rates and of course check the authenticity. The market is filled with both fake and genuine loan providers. You cannot afford to fall into a debt trap with a wrong loan provider. Also, go for the lowest rate of interest and also check and compare the tenure of disbursement.

Online application: Once you have selected your loan provider, fill in your online application along with all your documents. You must have all original and scanned copies of documents. You cannot miss any document as that will delay the process. For a home loan, the documentation will be a lengthy one and you will need to present everything on the table. Don’t end up with multiple applications as that will damage your credit score by running a hard enquiry.

Approval: You get approval within 2 to 3 days and you can feel overjoyed about the fact that finally, you can have your own home. Approval will be sent to your mail and you can go with the confirmation to help them disburse your amount within a short period.

Disbursement: As soon as you send the confirmation, the bank processes your loan amount, and the disbursal is done to your home dealer. You are just one step away from your home. Pay off your down payment and you are now ready to click your new home. What a joy it is, isn’t it?

Wrapping up

A home loan is a blessing to those who look forward to their own home. It is a wonderful way to fund your home and gives you access to a dream. Use a home loan calculator to know your cost and payment. Keep your finance updated, so that future debt becomes easy.