We all know that the purchase of a home is a lifetime commitment, and even a minor error while applying for a home loan could negatively affect your savings as well as your CIBIL score. You will need a home loan to finance your home purchase, whether you are going to buy a new house or plot, build a new house, or even restore an existing property. Numerous reputable banks and NBFCs now provide a range of home loan programmes at competitive interest rates to help you choose the best deal. Additionally, you may compare house loans given by numerous banks and NBFCs under one roof thanks to online portals or choosing to contact LIC Home Loan Customer Care and thus, allowing you to choose the option that is most affordable.
Now let’s assume that you have compared all the options and home loan providers and have selected one lender. It is suggested that before applying for a home loan, you must them the following questions to avoid last-minute shocks and any kind of inconvenience in future.
How do you determine whether I qualify for a home loan or not?
To find out how your home loan eligibility is determined, check with your lender or connect with Home Loan Customer Care. Almost all banks offer home loan amounts up to 60 times your current monthly net income. Banks also analyze your commitments to other EMIs as well as your CIBIL (credit) score (if any). As a result, you need to be aware of the precise criteria your lender will use to determine if you qualify for a house loan.
What kinds of home loans are available, and which one would be the best choice for you?
To meet the housing demands of people from diverse societal groups, many home loan lenders in India provide a variety of home loan programmes. Home loans for plots, home loans for remodelling, home loans for under-construction properties, home loans for properties that are ready to move into, home loans for NRIs, etc., are some of the most popular home loan alternatives provided by banks.
Understanding the numerous home loan programmes the bank offers will help you choose the best one for your needs. For instance, if you want to increase the number of bedrooms in your house, you can apply for a home loan extension loan. The right approach for you is to connect with home loan customer care.
Does my rate of interest depend on my CIBIL (credit) score?
One of the most crucial elements taken into account by lenders before extending you a home loan is your credit score. If you want to be eligible for a home loan with the amount of your choice at a low-interest rate, a credit score of 750 or more is considered to be good. If your credit score is below 700, the bank might not approve your application for a home loan, or they might approve it but charge you a hefty interest rate. As a result, it’s crucial that you ask your lender or LIC home loan customer care what mortgage interest rate, given your credit score, you can get.
Is your home loan’s interest rate given fixed or floating?
The total loan amount and EMIs can be significantly impacted by even a small variance in interest rates. To understand the risk position associated with the loan, ask your lender about the Annual Percentage Rate (APR) and clarify if the interest rate on your home loan will be fixed or floating. A home loan’s interest rate possibilities include, among others:
Home Loan with Fixed Interest Rate: The interest rate is constant for the duration of the loan.
Home loans with floating interest rates: The interest rate fluctuates in accordance with RBI’s base rate determination as a result of numerous economic circumstances.
What would loan term be suitable for you?
In general, home loan providers offer loan repayment terms ranging from 1 to 30 years. The adjustable home loan tenure, however, can be changed based on your income, age, and financial circumstances. Because your home loan EMIs are entirely dependent on the tenure you select, it is crucial to question your LIC home loan customer care and lender about the tenure range offered. Your EMI payments will be lower if you choose a longer term, but they will be more expensive if you choose a shorter term. To check your loan, use the home Loan EMI Calculator or speak with a home loan customer care to confirm the loan’s tenure.
What is the processing charge for house loans?
The home lenders will request a processing charge after your home loan application is authorized before authorizing the loan amount. The processing fee ranges from 0.5% to 2.50% of the loan amount and varies from bank to bank. Even though the processing fee is little, if you are unaware of it before applying for a house loan, it could end up costing you more money. As a result, be sure to ask your lender’s home loan customer care about the processing cost associated with your mortgage.
How much are the prepayment penalties on your home loan?
A home loan’s outstanding EMIs may be prepaid in whole if you receive a promotion, your business becomes profitable, or your financial situation improves for any other reason. If you choose to cancel your home loan account, the majority of banks will impose a small prepayment fee. It is crucial for you to know how much a prepayment fee would cost you if you decide to foreclose on your loan. You must be sure to inquire expressly as to whether there would be a prepayment penalty if you paid off your home loan early, even though most lenders and LIC home loan customer care for home loans will attempt to avoid answering this question for obvious reasons.
If you apply for a home loan, what extra amenities is the lender willing to provide?
The home loan market has grown competitive as new banks and NBFCs have entered the market. Therefore, lenders frequently provide extra incentives like free life insurance, top-up loans, a moratorium period, etc., to attract customers. You can use the money you save from these extra benefits to pay for other expenses. Therefore, being aware of these benefits will help you make the necessary plans.
Last but not least, find out from the lender if there will be a dedicated home loan representative on hand in case you have any further questions right before or during the application signing. Don’t forget to write down your home loan customer care service number and email address as well.