New Delhi | Jagran Business Office: Buying a home is a dream for everyone and achieving it is like achieving a major life achievement. Your home not only serves as a place for you and your family to live, but also as an assurance that your finances are safe for a long time. However, achieving this goal is difficult.
Since buying a house requires a huge investment, most buyers cannot buy one with the money they have saved and have to take out a loan. High property and house prices in India make buying a house quite difficult. A home loan is one of the best solutions to the current challenge of inflation in India. But, while it is true that a home loan can provide you with a home, you need to consider the home loan interest rate applicable to your home loan.
To learn more about home loans and what to keep in mind when applying for them, Jagran English spoke with Atul Monga, co-founder and CEO of BASIC Home Loan. So, if you are considering qualifying for a home loan, here are some of the answers to frequently asked questions.
– What role does your credit score play when applying for a home loan?
Atul Monga: Your credit score is an important factor when applying for a home loan. The higher your credit score, the more likely you are to be approved for your desired loan amount. The three main factors that lenders consider when evaluating your credit score are:
Payment history (35%)
Debt to income ratio (30%)
Story Duration (15%)
It is not difficult to determine which credit score category you are in. However, it is difficult to understand what the implications are for a different category. This is because the categories and scores have varied over the years and have different impacts on your eligibility for home loans.
– What is the minimum income level to apply for a mortgage?
There is no specific income level you need to qualify for a home loan. Some lenders may look at your monthly income, others may look at your annual income, and still others may look at your total assets. Several factors should be considered before getting started, including credit rating, income level, etc. While home loan rates are on a downward trend, loan eligibility requirements have also increased.
– Can I repay my mortgage in cash?
As per the Income Tax guidelines under Section 269ST, the provision of cash payment is applied for the repayment of a single cash loan installment which is less than Rs 2 lacs and not less than total amount. As per this rule, any cash payment over Rs 2 lacs will incur a fee.
– Do I have to pay a penalty on early repayment of a home loan?
In a home loan, prepayment penalties are fees the borrower pays when they pay off their home loan before the end of the term. The penalty is usually calculated as a percentage of the amount paid and can vary from 1% to 5%. These fees are intended to discourage borrowers from repaying their home loans early. However, in some cases, borrowers may be exempt from these penalties. For example, if a borrower has adjustable home loan rates, there is no prepayment charge, however, on a fixed home loan rate, lenders typically charge 2% of the total amount to be repaid.
– Can I take out another loan if I have already taken out a home loan?
The answer to this question is yes, you can take out another loan if you already have a home loan and these loans also come with benefits! But there are certain steps that need to be taken before applying for another loan. You must first calculate the monthly payments of their current loans and compare them with the total monthly income. If the total is less than what is needed to repay all the loans, they must apply for more loans.
If the total monthly income is more than what is needed to repay all the loans, it would be better if they did not apply for more loans. It would also be wise to check their credit report and credit score before applying for any type of loan as this will determine their eligibility.