In today’s day and age, affordable homes in convenient locations (which are close to workplace or areas having all amenities) have become difficult to purchase, due to which people resort to stay in a rental flat. However, the pleasure of owning a house cannot be experienced by staying in a rental apartment. People living in a rented house often face problems like early agreement termination and yearly relocations, which is why they have to shift houses on a yearly basis which then results in discomfort.
Suppose, you are residing in a rental apartment and want to invest in a property but cannot do so due to lack of financial backup. In such a situation, you can seek help from financial institutions. There are many lenders who offer Home Loans. As the repo rates have been dropped down by Reserve Bank of India (RBI), Home Loans have become quite economical. Thus, this can help you pay a low rate of interest on your housing loans.
However, besides this, you might still face some difficulty in managing a Home Loan. So here are a few tips that you must keep in mind to avoid a problematic situation in future:
- Down payment:
You might come across some lenders who can ask you to pay a huge amount on down payment. If not, then it is advisable to at least pay a down payment about 15% – 20% of the borrowed amount. By paying a down payment, you can reduce your EMI’s; doing this will thus reduce your financial stress. Also, it is essential that you don’t end up paying a huge down payment amount, as this can increase your financial stress too. You should avoid spending all your savings to reduce the EMI payment.
At times, lenders avoid giving a loan that can reduce the EMI amount by 40%. Hence, pay a down payment amount which fits your pocket.
- Check Credit Score:
If you are planning to borrow a loan, then checking your credit score history before applying is essential. At times, you might face a problem with your Home Loan application process, in case if you have a low credit score. Especially, if you have applied to the banks, there are chances that your Home Loan application can either get rejected or can have a slow processing. Whereas, if you have applied to a Non-Banking Financial Company (NBFCs), then they are considered to be flexible regarding credit score. On the other hand, having a good credit score can help you in availing a Home Loan easily. Thus, checking your credit score is important before applying for a Home Loan.
- Compare available options:
Although Home Loans have become affordable, it gets mandatory to check the Home Loan rates before applying. The interest rates of all financial institutions differ, which means you might come across some lenders who offer higher or lower Home Loan interest rates on the same amount. Thus, it is important to compare the Home Loan as well as its rate of interest before applying as you don’t end up paying higher interest.
Hence, these monetary tips can help you manage your Home Loans and also help you reduce your financial stress, especially if you are buying a house for the first time.