Buying a home is a huge investment decision and requires thorough research about the property, the builder, the rules and regulations, etc. It's also important that the buyer does not get carried away by lucrative deals and offers.
Once the property is finalized, one has to arrange the funds. Here are some mistakes you should avoid while going for a home loan:
Do not choose your lender first
In order to calculate whether your finances will be enough to make you eligible for a loan, most people opt to go to banks to find out about their eligibility. In most cases, they are duped, since the lenders are always looking to make money. You can find out your eligibility yourself. Sum up your and your spouse's annual compensation and multiply by four. That should give you an approximate amount of how much of loan amount you are eligible for.
Here, without any exception, all lenders require you to make the down-payment in a single instalment before the property is handed over. Generally, people assume that they can make the down-payment amount proportionately while the bank finances the rest.
Avoid window shopping
The best way to get a lender is to bargain. Try to shortlist at least three or four banks that are good enough to provide you with the required loan amount. It is always advisable to bargain regarding the interest rates, EMIs, etc. Since, apart from your income and payment structure potential, your negotiation skills will also be considered. And as a prudent loaner, get all the information about the processing fees, legal charges and other hidden costs before deciding on the loan amount.
Insure your home loan
By insuring your home loan with a life insurance and a critical illness policy you can benefit your family members with a home and not a home loan. In case of the death of the borrower, the life insurance cover can provide the family with a monetary cover. And for the critical illness policy, if in case the borrower is not able to earn due to any critical illness, say, heart stroke, kidney failure, etc, this policy will provide financial assistance wherein the interest amounts can be paid.
Disclaimer: All information in this article has been provided by BankBazaar.com and NDTV Profit is not responsible for the accuracy and completeness of the same.