Buy your First House with Home Loan Facility

Having a home of one’s own is like a dream come true and is one of the most important investments that a person or a family makes. Moreover, it is not just about the financial commitment, the first home also has great emotional significance for the family. With the help of home financing, it is possible to have a beautiful home in your city and there are many banks and leading NBFCs which provide home loans at affordable rates. For a first time home buyer, there is no need any more to wait till the end of retirement to buy a home. With some careful financial planning, one can have a home in their early thirties.

To get the best housing loan scheme, one should first check the home loan eligibility with the creditor of choice. It is a good idea to research between various lenders and check which lender’s criteria most suits the applicant’s situation. The age of the applicant, his income, his ability to produce all the documents required for home loan – including KYC documents, pay slips, IT returns of the last three consecutive years, bank details, credit report and the like- are important factors that determine the eligibility of an applicant. The lender would check of if the applicant can keep up with the repayment for a long loan tenure.

best housing loanThere are various home loan facilities now which can be availed from the bank and thanks to government schemes like PMAY (Pradhan Mantri Awas Yojana), one can also avail some rebates on the home loan interest rates. Usually, the rates can range from 8% to 12% but it could differ from creditor to creditor. One of the pre- requisites of successfully applying for a home loan is to have a good credit score. Hence, if one has long term plans of buying a home in future and applying for a loan, one should start building up their credit score well in advance. It would be a good idea to clear all outstanding bills and to reduce credit card dues as much as possible. If the lender sees that an applicant has a good score of 700 and above, then the application is accepted easily even for first time home buyers.

Availing a home loan can also result in tax savings and the principal and interest are exempted from taxes- meaning- that the portion of the income that goes towards the payment of the EMIs is exempted from all taxes. This is a huge plus and the first time home buyer can use the money to pay the EMIs instead. One can use the loan EMI calculator to determine how much one has to pay towards the EMI from the income each month. If that amount seems suitable enough and is within the applicant’s budget, then he can go ahead and apply for the loan by all means. In case one wants to bring down the home loan interest rate, one can also offer a mortgage as interests for secured loans are less than those of unsecured ones. One can offer a pre- existing ancestral property or one’s FD documents as collateral in this regard.

For a first time home buyer, it is also important to consider some other charges before applying for the loan. One should consider processing charges for the loan, prepayment charges and foreclosure charges. A few NBFCs has no prepayment charges and one also enjoys flexible repayment options. Hence, buying a home is not at all difficult as it seems and all it requires is some careful planning for a long term financial commitment.

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