Before buying a flat near EM Bypass, make sure you are aware of a few important things required when taking a home loan. Needless to say, that a home buying decision is very important and it depends on the amount of loan one can avail. However, before you decide to borrow, ensure that you keep certain important things in mind.

To be precise, real estate is not that affordable and for many, it is almost a dream come true if they are able to invest in a property. No wonder, real estate properties in metro cities are expensive and sometimes it becomes quite difficult to invest. Those who are the lucky ones to settle with an affordable deal, for them the major hurdle becomes the home loan before they get the keys to their home. In fact, getting loans involve a great amount of documentation and paperwork. It is not just time-consuming but exhausting as well when it is the first hunt for a good home and then apply for the loan.


Before you decide to take a home loan, here are a few things for you to remember, especially when you are a first-time loan seeker:

Know About The Equated Monthly Instalment (EMI) Affordability

One of the key factors that influence home loan right from the borrower’s point of view is the equated monthly instalment. The monthly outflow repays your loan in the coming 10-15 years. Do not even dare to over stretch yourself by thinking that you will be paid more in the future. You might have the propensity to push a bit more in order to get more home loan and then accordingly take on an additional EMI. Here goes the golden rule for you – never let your EMI exceed 40-45% of your total monthly income. Of course, if you earn more, you can easily pre-pay your loan with even the additional disposable funds. Nowadays, as most of the banks or financial institutions do not claim penalties on pre-payments, you can easily go ahead with the pre-payment idea.

Know About The Down Payment

As soon as you are sure of how much Equated Monthly Instalment, you can afford to buy a flat near EM Bypass, just cross check how much exactly you can pay from your pocket. Remember, you must at least contribute 20-25% of your property value that you have chosen. Please note that no bank offers 100% home loans to its borrowers. For example, if you are buying a property worth Rs. 25 Lac, the concerned bank will grant a home loan of a maximum of Rs. 20 Lac and the remaining you will have to arrange.

Make sure you check your loan eligibility, because any difference in your home loan amount may charge you directly and then again, you have to cut down the overall budget.


Know About The Interest Type

This is, in fact, the trickiest thing one can ever face when availing the home loan. Usually, home loans come with two important types of ROI (Rate of Interest). They are Fixed ROI and Floating ROI. Fixed Rate of Interest is all about keeping a constant rate for a period of at least 5-10 years and in some cases, it can be all through the tenure. Whereas, in Floating Rate of Interest, the interest rate can anytime vary depending on the norms of the Reserve Bank of India.

You have the comfort to switch between the fixed and floating Rate of Interest anytime during your tenure. However, do not forget to check the switching charge.


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