Steps to Get a Home Loan

Every person dreams of owning a home. Here are few facts that you may find useful to get your home financed.

The first step in applying for a home loan is to approach the right kind of financial institution. The rate of interests differ and hence choose the one that is suitable for you. Your loan amount will depend on your annual income and dependents. In case of a salaried individual, you have to submit your salary certificate from your employer and in case of being self employed, IT Return of last 2 to 3 years is essential. Banks may also ask for a copy of last 6 months’ bank statement or whatever that is being stipulated as per their norms.

After you arrange all these; get an attested copy of your residence and identity proof (e.g:PAN card, telephone bill.) as they will be asked for.

If you have already selected the property then it’s fine or else you can go for property searching facilities being offered by certain banks.

After you submit all these documents, it takes about 7 to 14 days to get the loan sanctioned. Some banks even do it in 48 hours of time.

If the loan gets sanctioned, then do keep the down payment money ready as banks offer only 75 to 85 percent of the price of the property. If you want to increase the loan amount , you can add up your spouse’s income and take him or her as co-applicant.

The rest of the repayment will be in the form of Equated Monthly Installments or EMIs.

Then it is the time to choose the type of interest rates you want to opt for. A fixed rate remains constant through out the loan tenure while a floating rate fluctuates on the fluctuation of the current interest rates in market.

Then comes the tenure of the loan. It depends upon your age. The younger you are, the more will be the tenure and vice versa. It can go up to 25 years in good cases but it will depend upon the lending institution.

A Term Insurance will then be done in your name by the bank to ensure that the repayment of the loan is done in case of an untimely demise of the borrower. If the bank doesn’t do that, you can do it yourself as it is a good step.

Another good news is that as per Indian Income Tax Laws, you can opt for Tax Benefits if you take a home loan. After you get your home, you can rent it out if you want to do so. But the property will be pledged to the lending institution till the completion of the payment.

So go for your dream home but remember it’s always better to cut a cloth as per the size of your coat. So never overstretch yourself. Buy and go for a home that you will be able to afford. After all, it will be you who will have to pay the EMIs. Best of luck.

Suddhadeb Chakraborti.

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