You may have come across a house that you have taken a special liking to and now want to own it! But what if you don’t have the money to complete the deal? You are desperate and don’t want this deal to get canceled. Fortunately, you can apply for home loans that are offered by leading banks, financial institutions, etc. These loans are created to cater to the different requirements and capacities of borrowers.
Uncomplicating things
Applying for a loan for many first-timers might appear to be a complex task. The fact is there are numerous documents to be submitted to the providers which if found satisfactory will enable getting approvals. Clear documentation with a good credit score can help get home financing dallas support with very less wait involved. You may even approach the top banks to derive low-interest home loans. Some research on the web and knowledge gained from others can help achieve your set goals.
Eligibility criteria
This is obviously the first thing to consider before even applying for a loan. Calculate EMI to determine eligibility to avail your desired amount as a loan. Banks generally take the borrower’s income for calculation purposes and consider just 40 to 50 percent of it. The calculation includes dearness allowance and basic salary. Also is considered your credit history. A poor credit score or existing loan will mean a reduction in the loan amount and/or an increase in interest rate.
Loan type
Banks generally are known to offer two interest types of home loans, namely:
- Floating type: Interest charged on this type is likely to vary based on the prevailing market conditions. Hence, the EMI amount to pay tends to fluctuate. It can be higher or lower at any time. Hence, its interest rate is about 1-2.5% higher than the fixed type.
- Fixed type: In this type, interest rates tend to remain the same throughout the entire tenure of the loan. You are to pay a specified EMI amount until the end of the loan period.
Interest rate
Whatever the interest rate option you choose, do remember to negotiate the interest charged. The truth is banks always have an upper hand. But they will not be eager to lose out on a good client with a high credit score or face stiff competition. Haggling might allow you to reduce your interest rate which can help save thousands. You can also benefit by applying for a home loan during month's end.
Fine print
It is necessary to understand that the agreement offered by the provider is actually a legally binding document. It will have all details mentioned very clearly about the loan offered. You might assume that not paying your EMI in a timely manner will cause trouble, perhaps you could be wrong! Several clauses might be hidden within the fine print. Hence, on getting the document, the first thing will be to go through it with patience and understand every word of it.
Other things to consider
Do get to know hidden clauses, penalty charges, processing fees involved, prepayment penalty, service charges, etc. Neglecting even a single point might only cause major issues later on.
