Planning to buy your dream house or build a magnificent bungalow on a plot of land? Maybe, you are planning to take a home loan? But are you sure what a home loan entails in terms of eligibility, down payment, interest rate, time, and so on? Here is everything you need to know before you decide to apply for a home loan.
A home loan is an essential financial affair. Therefore, the borrower needs to adhere to all kinds of eligibility criteria and be evident in all aspects of a housing loan. In brief, it should be carried forward with utmost responsibility and knowledge.
If you plan to go for a Home Loan, Kotak Housing Home Loan is there, just a call away from lending you the desired amount with an adequate interest rate. But before you visit the bank, have a look at these 5 basic thumb rules, which will be very efficient to you in choosing the most appropriate plan, including understanding terms like disbursement meaning to ensure clarity throughout the loan process.
Know your budget
There are so many options available for home loans out there in the market that include different kinds of schemes and fluctuation in interest rates. Banks are organizing their loans so that it sounds attractive, affordable, and reliable for salaried individuals. Hence it is a matter of prime concern to know about your need and the perfect budget for them. You have to study each home loan individually before deciding where to make the suitable investment. This will help you to prevent any future financial crisis.
Financial Independence
Always keep a great credit score. A credit score defines your financial stability without proving your economic conditions to your moneylender (Banks in these cases). Borrowers with a good credit score get affordable and reduced interest rates when taking home loans. Hence, if you are under any personal loan, keep repaying the interest amount in the said time interval, and after its completion, you will attain a high credit score. Considering this, you can then be able to opt for good home loans at the lowest interest rates.
The 30-50 Rule
If you opt for Kotak Housing Home Loan or any other loan, the bank would ask you to lay down the list of your previous borrowings – which means your existing liabilities like personal loan, car loan, etc. It is then recommended to opt for a home loan which includes a home loan EMI of not more than 35% of your total monthly salary, and your total EMIs, including your existing borrowings and other loans, should not add up to more than 50% of your entire monthly salary. This small yet significant rule will ensure that you don’t suffer from financial burdens each month.
Home Loan Tenure
Borrowers often chose longer tenure to repay their total loan amount. But do you know that opting for a long tenure will reduce your EMI and increase your total interest amount? Yes, it does. Hence, it is better to do your calculations and choose a shorter tenure period to repay your loan so that you don’t have to pay a heavy interest amount against the face value of the loan amount.
Rate of Interest
Kotak Housing Home Loan offers vivid schemes at affordable interest rates, an average of 6.50% p.a., with a maximum loan of Rs. 1 crore. Hence, it is crucial to choose your interest rate wisely to follow a dedicated and organized pattern of repayment that can suit your financial conditions. Always abide by the Home Loan Interest Calculator so that you get a feasible rate of interest for your home loan.
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In Conclusion
Well, this was all about the thumb rules describing and explaining home loans. Following this would ensure that you don’t suffer from any financial crisis and lead to a happy borrowing for your new home. Stay updated with new schemes and interest rates in the market and opt-out for the best loans so that you have a secure future under the roof of your magnificent and lovely new home.
For more, visit your nearest Kotak Bank and know about its Kotak Housing Home Loan in detail.