Apply for Home Loan - Home Loan EMI Calculator

You must do your homework before getting a new home loan if you want to get the best deal. In this article, we shall examine these factors. 

Before applying for a home loan, doing your own independent research of these financial products is important. Unfortunately, not all who apply for loans get their home loan application accepted. You’ll be surprised to know what percentage of applicants get rejected. And even if one’s home loan application is accepted, one cannot get the best possible deal if one is not prepared in advance.

Here are some of the things you need to do:

1. First, collect all the required documents and keep copies ready.
2. Know what loan amount you’ll be eligible for from beforehand.
3. Know what amount of funds or loan will be given towards the margin. Generally, lenders give 80% of a property’s cost.
4. After payment of EMIs, if there is any balance left, determine if that balance is enough to meet your other expenses. This is crucial in the case of an under-construction property since you may have to keep paying rent for some time yet.
5. Increase and maintain a good credit score.

Your home loan application may still be rejected.

Yes, that’s right! Your home loan may still be rejected even if you have a good credit score and have got all the necessary documents on hand.

It can happen even if you have home loan eligibility. Know that home loan eligibility is only one of the few factors. This happens:

• if the home or construction project is not approved by the concerned
• if the project has legal or title issues or is not registered under the RERA

Home loans and income stability

If you have income stability, then applying for a home loan from a bank or any Non-Banking Financial company is not so hard. Your eligibility for home credit is immediately under scanner by the bank authorities after you fill up the home loan application, and some normal verification process takes a couple of days.

However, before making an application for the loan, you should do some personal research to determine your eligibility for getting home loan approval.

Before approaching the bank or NBFC, do yourself some personal researches on the following factors mentioned below:

Your research should include these three crucial factors: down payment, repayment terms, and EMI calculations (nowadays, the easy availability of EMI calculators on various web pages related to the home loan interests calculations makes your task easier). In addition, keep in mind the number of home loans is generally higher than other loans, so make sure you have gone through all the details related to its procurement.

Check your pertaining documents, monthly income and expenditure lists and account balance before applying for the home credit.

Affordability

Affordability is an important factor you should consider before selecting the right option related to home credit.

Basically, there exist two different types of home credit.

(a) On the fixed rate of Interests

(b) On Floating home loan interest rate

Home loan eligibility

It is important to know whether you are eligible for the loan or not. Applying even if you are not eligible can lower your credit score.

Maintain your CIBIL score

Your Credit score maintenance is essential here to apply for any loan. Credit card balance or any previous loan repayment is not yet completed regularity definitely pays off well. 

Spend Cautiously

Do not spend extravagantly. Your expenditure lists are high, so that your credibility may hamper loan processing, plus the amount you get saved in re-payment of bank loan in future may not be a very difficult one.

Study the application form in detail

Study the documents carefully. Before you fill up and sign the loan application form, go through the content matters, i.e. terms and clauses mentioned in the form, carefully so that there is no misunderstanding between you and bank and NBFC loan officials in future.

Repayment terms and conditions offered by the bank and your income statement are factors you need to study in detail before finally applying for a home loan.

Spend cautiously: After the loan has been granted, you have to repay it after a period of time. Therefore, it is advisable to maintain a strict budget and control over your monthly expenses to pay the bank EMI to maintain credibility and avoid overdue charges.

What are the methods for procuring a home loan from any nationalized banks and similar other financial institutions:

• First of all, apply a letter to the manager or any similar level officials in NBFCs. Then, fill up the application form after going through the terms and conditions mentioned carefully. Usually, the application form is the proposal.
• The loan applicant-related information like name, address, contact number, educational qualification details, occupation details, and monthly or annual income must be mentioned accurately.
• Details of the property, i.e. the house, bungalow or flat you wish to buy along with its estimated cost, should be mentioned. Details of your ID proof, Say the Aadhaar Card number or Passport etc., and related other documents, ITR filing etc., should be submitted along with. 
• The bank authorities will verify the documents you have provided.2-3 days may be taken for detailed verification of the documents. Bank officials may take a short interview of yours during the verification period to ensure whether you are capable of repaying the loan within the specific period of time. Nothing to get worried about because, in the case of home loans, the maximum duration is allotted, which may be of 30 years for loan repayment on EMI mode.

• If the bank officials are convinced about your income status and the loan repayment capability, the housing loan process starts. You may have to pay a processing fee in this stage, i.e. an amount the bank collects to process your loan application.
• Banks generally take between 0.25% and 0.50% of the principal loan amount along with the GST charge as their processing fee. Before granting a loan to a bank or any agency, they are tied up with making investigations and valuation of the particular property-house, flat, etc. c, you are to buy a loan amount.
• Sometimes hypothecation of the asset till the final repayment of the loans is met, a priority for making a valuation of the asset. During the hypothecated period, the bank remains the actual owner of the property until the transfer of property takes place following the final repayment of the loan amount, which is basically on EMI mode.
• The most important stage here is the home loan approval. The bank authorities may decide whether to sanction or reject your loan application. The validity and fact-checkings of your submitted documents here is a key factor for getting your loan approved.
• Hence it is important to furnish the entire listed document truthfully. In this stage, the borrower can determine the maximum amount of loan the bank may approve, and the home loan interest rate charged according to various tenures.
•  Registration of the loan deal is the final step in the loan disbursal. It includes signing legal documents with the bank authorities, i.e., accepting the Terms and Conditions mentioned in the legal paper and getting the loan.

Basic differences between Fixed and Floating Rate of Interest:

 As the name suggests, it seems the fixed rate is not variable and cheaper than the floating rate, but in reality, the floating home loan interest rate is cheaper than the fixed rate of interest.

Fixed-rate is generally calculated on simple interest, not a compound rat. Still, in case of a long period loan term there, you have to incur additional charges during the entire tenure as per Reserve Bank's decisions, thus making it more expensive than the floating rate.

 A loan on a fixed rate of interest is not allotted for home loan taking but generally for a personal loan where the repayment period is short.

When a loan is taken on instalment, the borrower gets a fixed repayment term. During repayment, a portion of it goes towards the interest charges, and the rest is applied to the principal amount of the loan.

Is co-applicant mandatory for home loans?

A lot of people ask this question “is co-applicant mandatory for a home loan?” The truth is that having a co-applicant is always better. It increases your chances of getting any loan. Whether you are applying for home loans online or offline, it is always always better.

Caring for your credit score

When caring for your credit score, make sure all of your other loan payments are on time. This includes credit card payments! Additionally, and this is important, make sure your income tax returns filing is on time. This shall undoubtedly help you a lot.

Knowing your EMIs from beforehand with our home loan EMI calculator

Of course, you should never take a home loan blindly or without preparation. For instance, do you know how much EMI you’ll be paying each month? 

No?

Don’t worry! mymoneykarma has you covered. Use our handy mortgage calculator here to calculate the EMI! Just enter details like the loan amount, loan term, loan interest, and other information, and you’ll get your monthly EMIs on our home loan EMI calculator. Using our home loan EMI calculator is free and super easy to use.