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Planning to buy that long cherished dream home?? Well congratulations, in today’s day and age, just talking about buying a home can be a great source of excitement for a first-time homeowner. However often the reality of the situation overshadows the magic of the experience. Getting to understand all the options available and choosing the one most suitable can be a daunting task. Unlike before the availability of different sources of finance, in itself is one of the chief reasons people prefer to buy homes as opposed to rent them.
A good home loan scheme can really smoothen the way between you and your dream home. It is therefore crucial that you as a buyer have your basics on home loans clear. This will keep you from making some very expensive oversights during the purchase of a first home. Here is some basic “must-knows” about home loans.
• What kinds of home loans are there?
Home loans, home extension loans, home improvement loans, land loans, NRI loans, home equity loans, short-term bridge loans, converting high-interest loans, and low-interest housing loans.
• Who can get a home loan?
If you are an Indian resident or a non-resident individual, you can apply for a housing loan. In fact, you can also apply for a loan even before you've selected your property.
• How much can I get as a loan?
Housing finance companies do not bankroll the entire value of the property; you will need to chip in about 15-20 per cent of the total amount.
• What factors do housing finance companies/banks look at before sanctioning a housing loan?
In one word, credit-worthiness. Your credit-worthiness will depend on various factors such as age, qualifications, employment, work experience, dependents, previous track record of repaying any earlier loans you may have taken, etc.
• What is 'interest rest'? What is the difference between an annual and monthly rest?
Interest rest can be defined as the principal outstanding on the date, which is considered to calculate the interest.
• Other than the interest, what are the other costs I have to take into account when considering a housing loan?
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