As per recent data, the RBI recently linked the risk weight of home loans to LTV ratio, as applicable to all new housing loan sanctioned up to March 31st, 2022. This particular facility seems quite beneficial for the real estate sector, as it is expected to generate more revenue within the next few years.
Even though all these aspects have made a positive impact in the home loan segment, individuals are still required to keep certain things in mind before availing this advance. Borrowers inevitably come across a few components of housing loans that play vital roles in the credit sanctioning process.
In order to make sure the process goes smoothly, here are some important tips one should consider before they avail a home loan:
Compare different lenders
Depending on how much your equated monthly interest or EMI will be against the home loan, you can choose the tenor and total amount conveniently. Therefore, it is advisable to go through what different lending institutions are offering as interest rates before making a decision.
Maintain a healthy CIBIL score
No matter what strategy you have decided to apply in order to smoothly handle the repayment, a poor CIBIL score can hamper all your future plans. Make sure to keep a good repayment track record and maintain a credit score of 750 or above to meet the home loan eligibility criteria.
Foreclosure rules
Usually, it helps the borrowers to settle the outstanding home loan amount before its tenor ends. Therefore, along with other important aspects, you also need to ensure that your preferred financial institution does not impose any foreclosure penalty in case of early repayment.
Additionally, going through the home loan documents properly, making a sizable down payment, paying heed to additional charges, etc., should also be prioritized before you apply for a home loan.
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