Home loan tips for first time buyers
Own house is the dream of every person. For any middle class person, it really is regarded as a life time achievement as it requires quite a large amount of money. The products they provide and the services they provide are of immense use to people who intend to have their own house. For a safe and beneficial home loan, proper awareness on the products, policies, terms and conditions of the bank is most important as ignorance may result in more payments to the bank with regards to principal and interest components.
These ten-step plan will certainly help you in accomplishing the task:
Know about the products: Prior to going for any hdfc home loan learn about the products that various banks offer; also know about their conditions and terms. After careful study select a product that suits better to your financial status.
Know about the rate of Interest: This is actually the most important factor about which you must think more often than once prior to going for a home loan. Plan carefully whether you intend to go for a fixed or a floating interest rate plan. Have a good clarity from the bank so as to avoid disappointment later on. Also if you go for a set interest rate plan, make yourself clear if it’s fixed for the whole tenure or subjected to changes according to modifications in money market conditions.
Know about the repayment Period: Choose an apt repayment schedule according to your financial status and possible future growth. Usually banks provide a tenure which range from 1 to 25 years for mortgage loans, and 1 to 15 many years for home loans. So bearing in mind of the income levels and liabilities choose your personal plan for flexible repayments to avoid future disappointments.
Be aware of eligibility criteria: Banks typically take fixed and variable income sources into account when deciding whether to approve a home loan. They are entitled to reject an application if they believe any of the information provided is misleading. As a result, it is prudent to provide only useful, relevant information. Once you receive the sanction letter, please read it carefully for changes in the rate of interest, the sanction conditions, Pre-closure charges and terms and problems of the bank before signing it.
Legal documents and scrutiny: You must submit all of the legal documents pertaining to the property you plan to buy to the bank. So you must collect all the hyperlink documents, construct and plan, and ownership paperwork through the vendor. It is to be taken care that when there is certainly any lawful dispute on the property then the proceeding and judgment copies are also required.
Before you buy any property, you must find out if it’s legal. It is not the responsibility of the banks to deal with any future legal problems, and the customer has to continue to repay the loan. The bank will not assume any responsibility for the legality of the house.
In a technical evaluation, banks evaluate the property based on standards set by their panelists. There should be steps taken to eliminate deviations both horizontally and vertically, which will impact loan processing as well as future transactions. You need to ask the vendor for the regularization copies if there are any deviations. It should have the necessary permits or documents to regularize deviations in accordance with the building regularization scheme (BRS). Verify all the details, such as plot area, sanction area, story number and government-approved date validity, before going to get a processing.
Home Loan Agreement: Please read the document carefully before signing it since it is a long term contract between the customer and the bank. Once you sign the document it can not be altered or modified and soon you repay the loan in all respects.
Registration: Home Loan processing ends using the registration of one’s dream property. Take care that the sale deed clearly states about your complete ownership of the house.
Processing, pre-payment and foreclosure charges: The customers need to pay the processing charges towards the bank for the loan availed. The client should know about the additional charges which bank can make in cases of pre payments and foreclosures. A person needs to pay a max of 4 % of the outstanding principle alongside service tax to the foreclosure charges from the loan.
Tax exemption: In addition to giving the joy of possessing a house, home loan provides the facility of Tax exemption within the principal and interest paid more than a financial period.
If a customer pays stamp duty during the registration process, he or she is entitled to tax exemption. You can claim the tax exemption from the income Tax department and the Bank will provide you with a provisional certificate.