A home loan is a bare essential for one to buy a home even if you have the money to buy your home out of your own funds. Locking your own capital is not a great idea and procuring a home loan is the best option available as own funds can be utilized for emergencies, contingencies, retirement or even invested for higher returns.
Banks consider 40% to 50% of your net income as savings or surplus which you can pay for the EMIs. As a home loan is a long-term liability, the ability to pay the home loan for long is an important criterion and for that, the stability of your job becomes equally important
These bureaus take into account all your credit transactions and come to your credit score on a scale of 300 to 900. The credit scores are assessed on the basis of your loan history, credit history, repayment patterns, and many other parameters.
A fixed rate of interest remains the same throughout the whole tenure of the loan but the floating interest rate keeps on changing depending on the market fluctuations. The amount that you need to pay at a floating rate of interest is lower than the fixed rate of interest.
The more would be the interest rate and thus it is recommended to keep the loan tenure shorter so that you don’t end up paying more interests. However the banks would always calculate the maximum loan tenure till your retirement age, the goal should be to keep it as less as possible.
Read the terms and conditions in the loan agreement before signing the dotted line. Lack of prior knowledge about the home loan terms and conditions can put you off guard and make it difficult for you to pay the extra amounts that the bank charges.
