8 things to keep in mind while taking a home loan

1. Legality of the Property

Before you lay your hands on a property, make sure the builder is reputed and all papers of the property are in place. With RERA implemented across regions, you can check the builder's profile online on the RERA website. Banks often refuse to give loans if the builder is not in its approval list.

2. Down payment

You must have a budget chalked out before you start looking for a house. Calculate the down payment you would have to pay. It is usually about 20% of the value of the property. You can choose to pay more from your pocket if you can afford.

3. Check your eligibility criteria

Home loan lenders have a list of eligibility criterion and only if you happen to meet those, you are considered a potential borrower. Banks typically look at your credit history to understand your repayment habits and prefer a credit score of 750 for lending out.

4. Check the fees and charges associated with the loan

Home loans come with associated fees and charges. Processing fee is the most common fee payable at the time of application. Check if the fee is reasonable when you choose a lender.

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5. Check the interest rate

The interest rate on loans is a determining factor in deciding where to take your loan from. Lower the rate, lower would be the EMI outgo. Home loans are offered at fixed interest rates and floating interest rates.

6. Check your affordability of paying EMIs

Customers often take up a lot of burden when it comes to paying EMI thinking that it would get easier with time, as their income would increase eventually. Consider the possibilities of not getting a raise soon or other unforeseen circumstances.

7. Buy an insurance plan to cover the loan amount

Once you have taken a loan, the outstanding balance liability falls on your family's shoulders in your absence. You can avoid this financial burden on your family by buying a mortgage redemption insurance cover while taking home loan.

8. Shop around

There are hundreds of banks and financial institutions which offer home loans at attractive interest rates. Before buying a home loan, go online and compare the interest rates and charge structure of all available home loans.