Smart Home Loan Tips for First-Time Buyers

A home is an asset that provides shelter and can offer significant financial benefits, including potential returns on investment. However, purchasing your first house can come with many challenges, including the nitty-gritty of the finances. In such cases, a home loan can help you lessen your financial burden and prevent you from liquidating your savings. Since you are new to this, here are some smart home loan tips for first-time buyers:

Check Out Different Loan Providers

There are multiple loan providers in the market that are ready to offer affordable home loans. Ensure you conduct thorough research to find the best available options. While researching, consider factors like down payment, EMI, and repayment tenure in mind to make a well-informed decision.

Aim at Affordability

A crucial factor for any loan is its associated cost. Since home loans are more expensive, doing due diligence will help find more affordable options. See if you can afford the fixed monthly instalments so you can adjust them comfortably with your monthly budget. Consider the overhead monthly expenses you'll incur in addition to the EMIs, enabling you to prepare for unforeseen emergencies. You can use a home loan EMI calculator to get an estimate of your EMIs so you can plan accordingly.

Improve Your Credit Score

This is one of the most important factors for any loan, and home loans are no exception. Maintaining a good credit score shows that you will be able to pay off your loan. This will make the loan provider trust you more and may offer you an affordable interest rate. Ensure your CIBIL score is above 750, as this can increase your chances of quicker processing and disbursal.

Choose a Shorter Tenure

Choosing a shorter loan tenure is better than a longer tenure. A longer tenure might reduce the EMIs but will end up in a higher interest and overall loan amount. On the contrary, a shorter tenure will have a higher EMI amount but can reduce your overall financial burden, making the loan more affordable. You can use the saved money on other investments that can earn you better returns.

Accumulate Funds for Down Payment

Saving enough for your down payment is crucial so you are not financially burdened. For instance, if the home loan amount is INR 80 lakh, you will get approximately a maximum amount of INR 60 lakh as most lenders offer 75% of the loan amount. The remaining amount must be paid as a down payment. If you pay a higher down payment, your EMI burden would be lessened and vice versa.

Choose Projects Approved by the Loan Provider

It is best to choose a property that is approved by the bank, as such properties are generally free from legal issues. If it is an approved project, you can get quicker approval from the loan provider and there will be fewer chances of scams. This will also speed up your approval as well as the disbursement process.

All these tips will make your home-buying journey easy and hassle-free. Choose a reputed loan provider and use their home loan EMI calculator to see what you will be paying every month to make your financial life better.

About the Author:

The author is a home loan specialist with over 12 years of experience helping families navigate the home financing process. She has guided many first?time homebuyers to find the right loan products and secure competitive rates.