If you are planning to avail yourself of a home loan, here is a handy guide on things you should know and remember. 

1. Most people do not know that home loans are a type of secured financing. The property one buys with the home loan availed of serves as collateral. In case of loan default, the lender can sell the pledged property and recover losses. However, a lender cannot sell the pledged property without informing the borrower and without giving them sufficient time to arrange the funds needed to repay their loan and recover losses. Further, if a lender does sell the property, they cannot keep the entire amount. They can only keep the amount the borrower owes them and must return the rest.

2. Anyone planning to apply for a home loan must use online tools available for help. Home loan borrowers must use the home loan eligibility calculator to figure out the loan amount they are eligible for based on factors, such as income, age, current debt-to-income ratio, etc. Applying for a loan amount one is eligible for enhances one’s chances of loan approval. They must also use the home loan EMI calculator to figure out their EMIs. The home loan EMI calculator can prove helpful with repayment, prepayment and foreclosure planning. It can also save home loan borrowers from making the mistake of borrowing more than they can afford to repay. 

3. Home loan borrowers must do their research and find a lender willing to offer them low-interest rates, a loan tenor that makes repayment easy and a loan sanction that allows them to buy their dream home. Researching and finding the right lender will take time. However, this is something every home borrower must do. Home loan borrowers whose current lender is charging them a high home loan interest rate can transfer their home loan to another lender willing to refinance their loan at a lower interest rate using the home loan balance transfer facility. Almost all lenders offer this facility these days  

Also have a look at Guide to Home Loans.

4. Before initiating your home loan application, check your lender’s eligibility requirements and make sure you meet them. If you do not meet your lender’s eligibility requirements, do not apply for a home loan immediately. Instead, reach out to their representative and explain the reason behind your low home loan eligibility. You can also try talking to other lenders in the market, i.e. those who are not very strict about applicants meeting all of their home loan qualifying criteria. 

5. Lenders give high weightage to credit scores. To be eligible for a home loan in India, borrowers must have a credit score of at least 750. Individuals planning to apply for a home loan must check their credit score at least six months in advance. This way, if their credit score is short of 750, they can work on improving it first and then apply for a loan. Repaying all loan EMIs and credit card bills on time and using one’s credit cautiously can help one build one’s credit score quickly. 

These are very simple things that one should keep in mind when applying for a home loan. Keeping these things will not only allow one to repay a loan easily, but it will also allow them to avail of the loan on the most beneficial loan terms and conditions.