Home loan interest rates are falling and it's time to purchase your dream home. Most of the public sector banks and private banks are cutting home loan interest rates. With houses becoming affordable, it's time to make your home purchase.
Banks give you loans up to 90% of the cost of your house/property. You pay a part of the cost of the house from your own funds called down payment. You can choose the home loan tenure with a maximum tenure of 30 years depending on your eligibility.
Make sure you pay the home loan EMI's on time and never default on a home loan. If you don't, your Cibil score is badly affected and you can never avail another loan. The bank could also seize your home. Use this calculator to calculate home loan EMI's.
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If you have availed a home loan, make sure to pay the home loan EMI's in time. Otherwise you could lose your most prized possession, Your Home.
1. Check income before availing a home loan
Take a look at your income before availing a home loan. If you avail too high a home loan, you will struggle with home loan EMI's. This will stress your finances and might force you to default on the home loan.
Also remember that you incur maintenance charges, security fees and society fees, if you occupy your ready-to-move apartment and these fees are not covered in your home loan. Then, you have to furnish your home. Make sure you have money for all these expenses or you will struggle with home loan EMI repayments.
The bank assumes that 50% of your disposable income is available for repayment.
See also: No Cost EMI
If you opt for a home loan of higher tenure, the size of your home loan EMI's reduce. You will be able to easily make the repayments. If you are a victim of life's uncertainties like a job loss, you won't struggle with repayments. But, there is a catch. A home loan with a longer tenure increases your cost of borrowing. You land up paying more interest on a home loan with a tenure of 25 years, compared to a tenure of 20 years.
So make a decision. If you are comfortable with the home loan EMI's, then opt for a shorter home loan tenure which means high EMI's. If you feel you might struggle with repayments, opt for a longer home loan tenure which means lower EMI's.
SEE ALSO: Important Facts on Home Loans
3. Keep home loan EMI's in an emergency fund
Today, job security is a myth. With many citizens losing jobs, you better keep at least 7-8 home loan EMI's in an emergency fund. If you do this, you won't have to worry too much, if your salary is delayed or you lose your job. Keeping home loan EMI's in an emergency fund, ensures timely home loan EMI repayments and you get a good Cibil score.
Keep at least 7-8 home loan EMI's in an emergency fund and your family will enjoy a stress free life.
Home is a very precious asset and a home loan makes sure you get it. Make sure you pay the home loan EMI's in time. Never default on the home loan or you will lose this precious asset. Be Wise, Get Rich.
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