This article will discuss the common mistakes to avoid when you are looking for home loan online.
1. Minimal Idea Of Credit History
Your CIBIL report gives a fair idea of your credit history to lenders. This helps them to determine your repayment capability. That is why it is crucial to extract your credit history at least six months before you get the home loan. In case you have had a score lower than 750, try to improve the CIBIL score by eliminating any errors on the way.
2. Avoiding EMI Affordability
Generally, lenders prefer lending the home to those individuals who have total EMI obligation including the one for new home within 50 or 60% of their monthly income. Those people have higher chances of getting approval on home loans. But if you have one lower than that, your chances of approval decline. So, it would help if you tried to decrease your repayment obligations as much as possible by foreclosing/prepaying existing loans and purchasing new home loan for longer tenure & lower EMIs.
3. Overshooting The Limits
In the haste of getting a loan, do not just get what you are being offered. The housing loan may seem like all you need initially, but you must also think about the long run. Will you be able to afford it? Determine the affordability by calculating your monthly repayment amount first-hand using home loan EMI calculator. Be vigilant & do not aim for the skies.
4. Signing The Doc Carelessly
Many people are consistently rushing with their loans. That is why when they get the home loan documents at hand, they hardly go through everything carefully. This can cause severe complications in the long run. That is why it is wise to understand the documents and read them carefully before you sign them.
5. Not Comparing The Loans
The home loan interest rate and all other essentials in a loan vary from one lender to another. That is why it is wise to compare the loans with multiple lenders to choose the most suitable and affordable one for you. Not doing that may end up causing you more inconvenience than you expected. Standard Chartered Bank offers home loan attractive interest rate starting from 7.99% p.a. Check out their housing loan eligibility to avail the same.
6. Minimal Research On The Lender
It would help if you always indulged in comprehensive research when connecting with the lender for a home loan. Ask your references about the lender. Research about them online and find out more about their past assistance to other clients with the exact needs. It can tell you a lot about how useful and reliable they are for you.
7. Not Considering A Pre-approval
In this method, the lender provides principle approval regarding a specific loan amount they are willing to offer before applying for it. If you do not consider that, the loan process can be a lot lengthier and complicated. So, always make room for that online.
8. Not Factoring In Home Loans EMIs In Your Emergency Fund
Any financial inconvenience or instability can quickly leave imprints on your repayment potentiality. So, if you cannot pay the loan EMIs timely, you may end up suffering severe penalties and a reduction in scores. This may reduce your home loan eligibility. So, you must keep in mind to factor in at least every six months while setting your emergency corpus fund aside so that you don’t have to liquidate your existing assets or investments.
9. Don’t Make A Rush
You may hurry to get your dream home and start your new life but making a rush will only spoil the matter for you. Make sure you research properly before getting the home loan for the same and take every step carefully for minimal inconvenience later.
10. Gathering Insufficient Corpus For Loan Down Payment
Make sure you gather enough funds to contribute bigger corpus as Home loan down payment. Making a higher down payment has better chance to get a loan approval quickly and at lower interest rates.
The Bottom Line
If you make any mistake while purchasing a home loan online, you may end up regretting the idea later. That is why you must analyze those mistakes and eliminate them every step of the way.