Tips for Applying Home Loan
posted October 28, 2009 - 6:23amThe sky rocketing price of real estate is taking away the dream of dream houses for millions of people specially lower-middle working class not able to afford a hefty amount , pushed people for taking loans and have their own home.
Home lone always to be the nature of long term and paid for the period of 5 to 20 years, because the monthly installment will be lesser if extended for longer term. But the fact is ,if taken for longer period the repayment of loan installment and net interest will be more higher than the short term loan. So it needs a keen and thorough examination and calculation for the loan and various conditions applicable for it. Following are few points to consider and examine very minutely applying for home loan.
Your present income to be assessed as this is the resource determines the period and amount for fixing EMI. The balance between income, saving and expenses can help you to fix your liability. If your saving are less then long term loan can serve the problem. Otherwise short term payment of loan is preferred.
Future income does need to be taken into consideration whether your income is going to be reduced or increase. For example somebody is going to retire within five years then he should restrict his EMI for five years or any person feels his income or business is going to be large then he can opt for short term loam.
Rate of interest is also to be understood as it always vary and impact more for longer duration loan. The gross amount of loan is responsible for making it short term or long term because the monthly installment is set to repay the total loan amount with interest. if you need smaller loan then try to keep the payment period shorter.
Before going for any type of loan must make sure the purposes for loan is to be taken. Generally people go for loan in purchasing property either for investment or personal use. If loan is applied for investment purpose then short term loan is suggested otherwise long term can be befitting for personal use. The above facts are interrelated to each-other and negligence can lead for bigger trouble for debtor.
A person applying for loan must be in the position to read and understood compete terms and conditions served by bankers and all hidden charges are to discussed before signing the final document because once debtor signs the paper ,he becomes liable for all charges imposed over him and failure or denial to it may lead to legal action and a lot of complication initiated by banker. Any concession or offer given by banker must be written as these are not on permanent nature and be scrapped any time in future adding extra load on EMI.If the language and terms are difficult to understood then expert or experience persons help is necessary. The most important part is to preserve all the related document and to be produced if needed. If possible the Xerox copy of the loan is to be used and keep the main document safe. Sometimes bankers announces special offer for new and old loan as well. So be watchful through news paper and media and approach immediately to claim your concession because the bank will never call you and even don’t give an ear when the offer period is offer. If you feel you are loaded with illegal and unwanted charges which were not discussed in agreement, can report to regulatory body or consumer forum and sue them
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