Read about these common mistakes before you apply for a home loan

by Finway FSC Empowering People Financially

Taking home loan has become a common occurrence these days – especially as more and more people are moving towards the cities due to urbanization. Home is everyone’s dream and if a home loan in Delhi can help you achieve that, you should consider taking it. There are, however, some pitfalls that we need to avoid, in order to make the most of our loan, without getting into unnecessary troubles that might ruin the experience of buying a house. Let’s take a look at some of those common mistakes:

Not having enough money for down payment

The banks usually provide home loan in Delhi that is 80% of the value of the property. This means that the remaining 20% of the money would have to be arranged by you as a down payment amount. Also, the bank will ask you to provide the down payment amount before it disburses the loan. So make sure you have enough down payment amount stacked.

Applying a loan amount than you can repay

There’s an old saying that you shouldn’t bite more than you can chew. Whenever you’re applying for a loan, make sure your EMI isn’t coming out to be more than 30% of your salary. Also, don’t hedge your bets on the future. You may apply for a higher loan thinking you have an increment coming up, but what if that increment isn’t as high as you expected it to be? You’ll be in a financial fix. So avoid borrowing more than you can repay.

Taking a loan for a short tenure

This mistake cannot be over-emphasized. People make this mistake so often because they want to get rid of the loan as soon as possible. But if you take loan on a shorter tenure, it means that you have to pay higher EMIs. If an unforeseen financial expenditure arises in the future, you’ll be in massive trouble because you already would have been paying to the maximum of your ability. Even on low interest home loans, short tenure isn’t a good idea. Also, if you have surplus money, instead of opting for a shorter tenure, invest that money somewhere as it will cover for you interest and generate profit for you.

Not comparing

Nowadays, there are a lot of websites that allow you to compare the loan products of different banks on the basis of interest rates, penalties, processing charges etc. Doing a comparison is the only way to find the best option. Don’t make a lifelong decision based on random advice from random people. Do your own research.

Not monitoring credit scores

One important step in the loan approval process is the checking of your credit score. If you have ruined your credit score by not paying your EMIs on times and by not taking care of your credit card debts, then you’ll severely diminish your chances of getting a home loan in Delhi or anywhere else in the country.