How To Structure Your Home Loan?
When you start your hunt for a housing loan, you may have an option of getting the best home loan in India available. However, without the right structure, it won’t be a beneficial financial decision in the long term. When most borrowers go through such a stringent home loan eligibility criteria and a tedious home loan process, they fail to notice the important details of the agreement. Here is how you can structure the home loan process in India.
Finalize the primary details:
There are certain details of the home loan that you will need to determine or agree with the ones stipulated by the housing finance company, since these details are primary foundation of what the home loan structure is all about. Therefore, it is crucial to get them right. So, this part of the home loan structure starts when you decide to apply for a home loan and ends when you receive an offer letter that you are ok with. These primary details are:
• Interest rate
• Type of interest rate
• EMI
• House loan tenure
• Repayment option
By far, these details will be the most important details in your home loan package. However, they can be easily affected by the smaller factors that seem unimportant while signing the house loan agreement.
Fine-tune smaller details:
When you are opting for a housing loan with a certain bank or a housing finance company, you need to understand that the fine print in the home loan agreement is as important as the details mentioned above. Do not ignore them. When you have an offer letter from the bank or the housing finance company in your hand, it is important to take time and understand how it can affect your future. The factors to be considered are:
• Prepayment charges
• Processing fees and charges
• Home loan term insurance
Anticipate the details right:
Most borrowers ignore the potential variations in the home loan structure over a period of time. The interest rates will certainly vary, especially if you have opted for the floating interest rates. Your EMIs will be affected by quite a few factors that are part of the home loan agreement. A smart borrower will, hence, want to undertake the exercises that will help him to anticipate these details. Some of them may even opt to use the home loan EMI calculators available online to identify these possible variations. Alternatively, if you have plans to earn more in the upcoming future, then determine the prepayment strategy and repayment options that will suit you. This kind of plan may not always fall in place as you will like; yet, you should have itin place.
