3 Dos And Don’ts Of Home Loan Repayment

Purchasing your dream home may not be a dream any longer thanks to financial aids like home loan. With its easy processing and flexible rates, one can easily take the necessary steps to apply for the application for this loan. In addition to this, one can even take the assistance of financial tools like the housing loan EMI calculator to ensure that the loan application process goes smooth.

However, while applying for the loan may be convenient, one must also consider the repayment factor. Here are the dos and don’ts one would need to consider when applying for the home loan:

Do’s:

1. Know your down payment

Before the applicant can opt for a home loan, one would need to consider how much funds one possesses before proceeding with the application. This is crucial as many financial institutes will consider the down payment the applicant will put for the application. If the applicant has a substantial stake in the property, the financial institute will consider the investment as low risk, thus assuring you with better rates and features.

2. Fix your repayment tenure as per financial requirements

As per the features of the home loan, one would need to repay the loan within a fixed period of time. This repayment tenure can last anywhere between 15 years to 30 years. When opting for a tenure period, it may be convenient to opt for one that lasts for a long time. However, keep in mind, one’s financials habits may change over the course in time, with the possibility of additional loans. Using the housing loan EMI calculator, one can easily calculate the ideal repayment tenure that will suit the applicant’s requirement with the inclusion of any future projections.

3. Find the ideal Property Location

Initially, when purchasing property in the first place, one would need to consider the location of the property. It is a rule that the location of the home often determines the price of the loan. In the situation where the value of the property is high, the consecutive interest rate is also high. Select the property with a price that is within one’s budget so as to avoid high interest rates during the repayment period.

Don’t

* Opt for unaffordable principle amount

While you may have sufficient funds for a down payment, one should not opt for a principle amount that is well beyond one’s budget. A large principle amount will affect the interest rates and turn; will affect the repayment process successively. Use the housing loan EMI calculator to calculate the ideal principle amount that will satisfy your needs.

* Go for a foreclosure unless necessary

Several financial institutes offer a means to foreclose the home loan before the repayment tenure. One must only opt for this option if there is an urgent need for it. Additionally, consider the rates of pre closure fee before opting for this option.

* Opt for a type of interest rate that is not affordable

Home loans provide a fixed and a floating interest rate. One can easily opt for either of the options based on the financial requirements. However, both these types of interest rates offer different benefits and features. It is ideally best to opt for the type of interest rate that is suited to the applicant’s needs.