Home loan is a thing that almost every person looks for when he/she decided to own a property. This is a general phenomenon as not every aspiring home buyer has such a big amount available with him/her in order to make payment for the property purchase. In fact, those having cash consider sanctioning of a home loan as it helps them secure their cash amount. But, don’t get excited about owning a home and check out the mistakes people do when they step in a bank to apply for a home loan. What not to do is important to know and thus we have listed all the seven mistakes you must know when it comes to applying for a home loan as the happening of even one out of these seven mistakes can lead you in a financial crunch. So, scroll down the page and know the mistakes to avoid when applying for a home loan:
- Inadequate Funds
According to the norms of RBI i.e. the Reserve bank of India, the banks can sanction 80% of the home loan in case the applicant fits appropriately in the eligibility criteria and the rest percentage which can get sanctioned in some cases depends upon the applicant’s CIBIL score. The CIBIL score showcases a person’s repayment capacity which every lender takes a look at before sanctioning a home loan. This score plays an import role as a person is required to pay 20% of the down payment also known as the token money from him/herself after which he/she is also responsible to pay half of the salary as EMI of loan repayment.
So, if you are planning to purchase a home then start savings from today as you are required to pay a handsome amount for booking and then have to pay EMIs on a regular basis which is not possible without sufficient or adequate account balance.
- Don’t Apply for a Huge Loan Amount
Many people alias the home buyers plan to accomplish various things with the home loan amount which they are going to avail for property purchase. But, let us remind you that don’t fall for more as you are the only person who is required to repay the home loan. So, getting a huge amount of home loan means paying EMIs [Estimated Monthly Installments] for a longer period and the home loan is always disbursed at a floating rate. So, the decrease in the floating rate is not going to affect you as it is not applicable to the people who have already availed a loan. But, the an increase in floating rate will directly affect you as the people already paying EMIs have to pay increased amount of EMI.
Hence, the real estate experts also feel that a person should apply for a home loan with medium repayment tenure so that he/she can close the loan account within the minimum possible time.
- Opting for Inappropriate Loan
There are several types of home loan. So, you as an applicant must take a home loan that suits you the best. Sometimes, people get so much excited about owning a home that they try to avail a loan which is can be sanctioned in the minimum possible time. This is the biggest mistake as you being the loan borrower have to repay it and thus you must consider the EMIs to be paid, loan closure period and other details. In short, act smart and wise instead of being a super excited home buyer as people take wrong decisions in haste which they regret later on.
- Relying only One Bank
A home loan applicant must not depend on a single bank for approval of the same. Instead, he/she should compare the home loan rates, tenure and other details and should opt for the one which offers maximum home loan at a minimum rate. Apart from this, you must also not take bill payments lightly and must pay the credit cards bill on time as they help you get a good CIBIL score.
- Not Checking Home Loan Agreement
Home buying is one long process and home loan sanction is a part of it. So, check the loan agreement papers and be assured of what you are availing and how much time you is declared to repay the same.