The repo rate has been reduced by the RBI to record lows, enabling consumer loans, such as mortgages and home loans, to be quite reasonable. Therefore, this could be an excellent opportunity to pursue your dream of buying your first house. Moreover, popular credit options such as ICICI Home Loans, offer additional benefits to first-time loan seekers.
However, since a home loan is a significant financial commitment over a period of 15-20 years or more, it is vital to know the fundamentals. Therefore, keep reading to learn a few tips.
Top 7 Expert Tips for First-Time Home Loan Consumers
Here are seven tips to remember if you’re seeking a home loan to buy your first house:
1) Determine Your Budget and Plan the Loan Amount
It would help if you determined how much of a loan you can afford to take out and repay since a home loan is a long-term commitment. Additionally, you ought to have a sufficient amount of savings for a down payment. Once you’ve established a budget, it’s simple to eliminate some of the properties. However, even if you get the possibility of securing a high amount, it is essential that you stick to your budget, as it will only increase your EMI burden in the long term otherwise.
2) Gather Funds for Down Payment
Loans are essential in the home-buying process, although lenders only fund roughly 85% of the total value. For instance, if your house is valued at Rs. 60 Lakhs, the lender will only loan you up to Rs. 51 Lakhs. Therefore, a down payment is required to cover the remaining amount. A larger down payment is highly recommended as it can minimise the cost of the EMI. Consequently, careful financial planning is also necessary to ensure that your regular expenditures are not disrupted.
3) Learn the Necessities and Eligibility Criteria for Home Loan
You will get a loan only if you are eligible for it. Each financial institution has eligibility standards that it uses to decide which loan applications to approve and which to deny. Before approving the loan, they will examine factors like your income, credit score, any outstanding loans, and age.
Most lenders will consider you for a home loan if you are a salaried or self-employed professional with a stable source of earnings above Rs. 25,000 per month and a credit rating above 700. You can also check your credit score for free once a year by visiting the CIBIL website. You can then take steps to improve it if it is too low.
4) Apply for Pre-Approved Home Loan
Lending institutions often provide pre-approved loans to their existing customers. These greatly speed up the loan approval and disbursal process. The sanction letter has a six-month validity window in which a loan application must be submitted.
A pre-approved loan allows first-time buyers to determine their budget for the property, making the home-buying process easier. In addition, an already pre-approved loan facilitates the formulation of a plan for the down payment that the borrower needs to pay in order to lower the EMI.
5) Choose Projects Approved by Lending Institutions
Choosing a lender-approved property ensures that the said property is unencumbered. So, in order to prevent builder fraud, credit lenders typically only approve loans after carefully scrutinising the property documents and official approvals. Therefore, it is simple to approve loans for and make payments on projects that have received approval.
6) Know the Available Tax Benefits
If you are a first-time home loan seeker, it is critical to understand the maximum tax benefits available from your first home loan. For instance, they contribute significantly to tax savings, and it is vital that you claim the appropriate benefits on tax returns.
7) Choose the Right Lender
Lastly, remember to choose a lender wisely. There are several lending institutions offering competitive home loan interest rates. Therefore, take your time to weigh out the tenure and the long-term EMI burden. For instance, ICICI bank offers an extended tenure of up to 30 years with attractive interest rates and minimal documentation. Therefore, you can secure a higher amount to get the house of your dreams by simply choosing the correct lender.
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Benefits of ICICI Bank Home Loans
Among several credible lenders, ICICI Bank is one and has a wide range of benefits in its home loan schemes. Some of these benefits include:
- There are no prepayment or foreclosure charges for floating-rate loans.
- You can track your loan application status online using the Track my loan Application feature on the official website of ICICI Bank.
- The digital sanction process makes the loan approval process faster.
- There are attractive benefits for top banking customers as well as women.
- You can repay your home loan in smaller EMIs at first and eventually increase it over a tenure of 30 years to spread your EMI out over a more extended period. However, this feature is subject to conditions.
- You can get attractive interest rates as low as 8.95% for different categories.
- There is a provision for home loan transfer from another bank to ICICI Bank that enables you to complete your repayment with a reduced EMI.
Only a few lenders let you apply for a first-time home buyer loan online. Therefore, you should negotiate before finalising any home loans, as it can save you a lot of money. Opt for credible offers such as ICICI Home Loan to get attractive and reliable deals. After you have saved for the down payment, you should set aside money for interior expenses, etc. Finally, you can use these to make your dream of owning a property a reality.
