Tips to Make Your Housing Loan Experience Better

You need to consider multiple factors when purchasing a home. The location and the builder’s reputation are important. However, finances are paramount to help you secure your goal of buying your dream home. That’s where the housing loan comes in handy. Home loans help you with funds to get the home of your choice while allowing you to pay off the money in easy monthly installments.

While many lending institutions offer housing loans, there’s a lot of confusion about the different terms. The lack of information might dissuade you from applying for a home loan. Yet, applying for a home loan and getting it approved is easy.

Read below to know the tips to make your home loan experience better

1. Keep Track of your Credit Score- Credit score is an important determinant of your loan eligibility. Your previous loan history and credit card history are considered while determining your credit score. The score ranges from 300 to 900, with a score above 750 considered excellent. You can download your credit report online. While applying for a loan, lending institutions check your credit score to determine your loan eligibility. Most lenders only consider applicants with credit scores of 700 or higher. A high credit score helps you secure your housing loan at a lower interest rate.
   
2. Save money for Down Payment- Having money for a down payment helps you in getting a loan. While the down payment required varies among lending institutions, the minimum down payment amount ranges from 10% to 20% of the value of the property. Thus, you should start saving money monthly to ensure you have the required down payment amount ready before applying for a loan. With a higher down payment, your chances of securing a lower interest loan increase significantly, taking you one step closer to purchasing your home.
   
3. Have the Documents Ready- It’s vital to have all your paperwork ready to smoothen the loan process. The important documents required include address proof, salary slips, tax returns, and bank statements. Most lenders require PAN, and may not issue loans to individuals who do not have a PAN available. . By having all the documents ready, you won’t have to rush at the last moment, thereby making the loan process easier.
   
4. Research about different loan terms- Multiple lending institutions offer housing loans. It can become confusing to decide what is best for you. You can use a home loan EMI calculator to determine your payments. Alternatively, you can compare loan terms on an aggregated website to have an easy tabular comparison of various home loan offerings. Remember, just a low-interest rate is not enough. The money you need to pay can vary based on loan tenure, down payment, floating vs fixed interest rates, etc. So research thoroughly before finalizing your lender.
   
5. Apply for Pre-Qualification- The first stage of pre-approval is pre-qualification. It provides you with an estimate of how much of a loan you could be eligible for. The pre-qualified offer is solely based on your data to the lending institution. Financial facts such as credit history, current financial condition, yearly income, net monthly income, the firm you work for, your debt-to-income ratio, and so on may be requested by the lending institution. After receiving the relevant information, the lending institution will conduct verification and offer you a loan that best meets your needs.
   
6. Use the Home Loan Calculator- It’s vital to plan your repayment to meet the requirements for a home loan application. Use a home loan EMI calculator, which helps you organize your budget based on data.
   
7. Communicate with the lender- Make sure you respond quickly if your lender approaches you with queries. This can help the lender maintain your loan application up to date and move the process forward more quickly.
   
8. Have a Discipline on Credit Habits- Lenders may look at your credit score during the home loan verification process. As a result, it’s critical to maintain good financial habits while your home loan is processed.

Securing a home loan has never been easier. With multiple options available and attractive schemes offered by lending institutions, you can get your dream home. The home loan process might seem complicated, but you can fast-track the process, saving time for you and the lender.

Keep the above tips in mind to make your housing loan process smoother. Check out different loan schemes offered by lending institutions and decide which works the best for you.