Availing a housing loan requires individuals to strategise proper financial planning to facilitate the repayment. Nonetheless, while most borrowers check some basic specifications like interest rates, tenor, home loan EMI, etc., they need to consider several other factors.
Following are some of the crucial pointers every home buyer should know.
- Lenders might revise the interest rate during the tenor
Often borrowers have a misconception that credit score is only required at the time of loan application, which is not true. Since RBI has made it compulsory to link the floating interest rate with an external benchmark like repo rate, any revision influences home loan interest rates.
For instance, if RBI announces a hike in repo rate, the interest rate of home loan will increase accordingly. In a different scenario, the home loan eligibility, like the credit score of a borrower, also determines the interest rate. If the credit score falls below 750 during the tenor, lenders may increase the rate.
- Additional charges
Besides interest rates, lenders also levy additional charges on a home loan. For instance, besides EMI payment, borrowers may need to pay processing fees, prepayment fees, foreclosure fees, etc., as and where applicable.
They can also use a home loan calculator to estimate their EMI beforehand.
- Co-applicants cannot apply for tax exemptions if they are not co-owner of the property
if you have applied for a home loan with a co-borrower, he/she has also to be a co-owner of the property, only then can both of you claim for applicable tax exemptions. Hence, having ownership is the primary criteria to avail tax benefits.
Therefore, it is high time aspiring homeowners should know about these facts before applying for a housing loan.
