Buying a home is one of the biggest financial decisions. A large number of individuals require a loan to buy their dream home. Most financial institutions like banks and non-banking financial companies (NBFCs) provide such loans, thereby fulfilling individuals’ wish of owning their dream home. However, such loans are long-term and borrowers need to plan properly to ensure they are able to meet the equated monthly installments (EMIs).
Here are seven factors to consider for planning your EMIs.
1. Income stability
The first tip is to plan the home loan EMI based on your income stability. You must consider your monthly expenses to determine the amount you will have to pay the EMI without financial distress.
2. Additional expenses
In addition to your regular expenses, there may be some unforeseen expenditures. The amount of the housing loan EMI must consider current and future expenses to avoid any difficulties.
If you are young, there is a higher possibility that your income will increase over the years. Moreover, you are able to pay a higher EMI because you have lower responsibilities. Lenders often consider your age to determine the interest on the housing loan.
4. Interest rate
The interest rate does not remain constant during the entire loan tenure. Fixed rates are not preferred because these are often high. Therefore, when you plan for the housing loan EMI, you must consider the interest fluctuations in the future.
5. Financial goals
Buying a dream home is one of the biggest financial decisions. However, there will be other goals, such as marriage, children’s education, and retirement. All these must be considered while determining the EMI.
6. Loan duration
If you want to repay the loan faster, you will have to pay a higher EMI for a shorter duration. However, if you do not want to use a major part of your income towards the EMI, you may consider a longer duration. The estimated EMI may be checked using a home loan calculator.
7. Living standard
Your lifestyle is affected when you avail a loan. You may have to make adjustments to your living standard to ensure you have no trouble paying the EMI.
The best way to acquire your dream residence is to apply for a home loan. Almost every financial institution offers such loans making it easy to avail of one. Here are the documents needed for a loan.
- Income proof
- Property documents
- Proof of business
- Address proof
- Photo identity
In addition to understanding the documents required for a home loan, it is recommended you check the eligibility criteria. Here are the eligibility criteria:
- Minimum age: 23 years
- Maximum age: 70 years
- Good credit score
- Three years in business for self-employed applicants
- Three years experience if salaried
- Clean history of loans and statutory payments
The home loan eligibility criteria and documents are not complex. Nonetheless, it is recommended that you do your research and compare different options to make an informed decision.
You may apply online for a convenient and hassle-free experience. So, apply for a home loan in India and buy your dream residence today.