Getting a loan is an important step when buying your first home, and there are various aspects to consider when choosing the best one. While the myriad of financing options available to first-time homebuyers may seem daunting, learning the basics of real estate finance can save you time and money.
Understanding the property’s market and whether it offers financial advantages to lenders can bring you additional financial benefits. You can also ensure that you purchase loan that best suits your needs by taking a good look at your finances. This article explains some of the key elements that aspiring homeowners should be aware of before making such a significant investment.
First-Time Homebuyer Requirements
In order to be approved for a loan, you must meet a set of standards that vary depending on the type of loan you are looking for.
To be accepted as a first buyer, you must meet the first homeowner criteria, which are broader than you think. A first-time homebuyer is someone who has not owned the main home for three years, is a single person who owned only with a spouse, owned only a home that was not permanently attached to a foundation, or owned only real estate, which does not meet building requirements.
You’ll generally need to have proof of income for a minimum of two years sufficient to pay the mortgage. While comparing home loans, it is necessary to check some key facts from different lenders. The major key points of comparison when it comes to loans are as follows:
- Interest rates
- Processing fees
- Turnaround time
- Loan to value Ratio
However, you should look at the loan as a whole and not focus on individual components. If the loan has a low-interest rate, the fee structure is likely to be significant.
Check and compare the interest rates of different banks in India for mortgage loans.
The main criterion for comparison is the reduced interest rate. This affects your monthly EMI and total billable. A home loan with a low-interest rate is recommended for a long-term loan. The banks listed below are some of the best for home loans.
- SBI Home Loan 6.70 – 6.90%
- HDFC Ltd 6.70 – 7.15%
- ICICI Bank 6.95 – 7.60%
- LIC Housing Finance 6.66 – 7.30%
Most clients prefer to first select a home that meets their needs and preferences and then apply for a loan from the several options available. However, it is possible that they will not qualify for a large amount of home loans. As a result, when you buy a house, you need to know if you can get a loan for it and how much you can borrow. This will prepare you for buying a home and help prevent future troubles. It is possible that the objects under construction will not be considered collateral assets for obtaining a mortgage loan. As a result, before you buy a house, you must double-check these details with your bank.
Ease of Home Loan Processing
The process of applying for a home loan can take a long time. You have to provide a huge amount of income and property documents, and the loan approval process depends on the bank. Although there are many agents who specialize in banking processes, their reliability is questionable. So, before deciding which bank is best to apply for a home loan, you should do some research.
The Bottom Line
If you don’t know what you’re doing, applying for a mortgage for the first time can be difficult. Whether it’s a starter home or a home for life, buying a home is an important step. You can take steps to make sure you’re ready to apply for a mortgage now that you’ve read our mortgage guide, increasing your chances of getting a low-interest loan. Shop around for the best loan lenders, no matter what form of loan you are looking for or how much you want to borrow. Give yourself time to work through this process. A little patience can make a difficult task much more bearable.