Owning a home is the dream of every individual is considered as a lifetime achievement because it needs a huge amount of money. Banks play a crucial role in fulfilling this indispensable need. The services they offer are of immense use to people who aim to have their own home. However, right awareness on the products, rules and terms of the bank is vital as lack of knowledge may cause additional payments to the bank in terms of interest costs. With right planning and a correct approach, you can avail a simple and advantageous home loan to accomplish your dream of owning a home.
Ahead of choosing a home loan, acquaint yourself with, the products that different banks offer; as well be familiar with their terms. After careful study, decide on a product that goes with your economic condition. Plan carefully whether you would like to prefer a fixed or a variable interest rate plan. In addition, if you go for a fixed interest rate plan, make yourself clear if it is fixed for the entire term or may fluctuate as per variations in money market. Prefer a suitable repayment program as per your monetary condition along with likely future growth. On average banks offer a tenure ranging from 5 to 30 years for home mortgage loans; therefore consider your income levels and obligations to prefer your own plan to avoid future discontents.
Banks consider all income sources and reserve the right to approve or refuse the application if they come across any false information, therefore give useful and correct information only. After you take delivery of the approval letter, examine it carefully for Interest rate adjustments, approved conditions, pre payment charges and other terms of the bank ahead of signing it. You have to tender all the legal documents relevant to the home you plan to acquire to the bank. Therefore, you should collect all the related documents and ownership documents from the seller. You should confirm the legality of the property with a legal advisor before purchasing it. Banks will not hold any accountability on legal issue that might crop up hereafter, and the buyer has to keep on repaying the loan.
Banks appraise the cost of the property derived from the values set by their board members. Please go through all the legal documents like sale deed, plan sanctioned by town planning commission, see to it that all details are correct and the property is build and certified by town planning commission. In addition, go through all the documents related to your home loan carefully earlier than signing it, as it is a long term agreement between the buyer and the bank. As soon as you sign the document, it can t be changed or revised until you pay off the loan completely.
Home loan processing ends with the registration of your home. Confirm that the sale deed evidently states on your absolute possession of the home. Go through the sale deed carefully before submitting for the registration process. The buyer has to pay the processing charges to the bank for the loan availed. The buyer should be familiar with the extra charges that bank will make in case of pre payments and foreclosures. A buyer has to pay a max of 4 of the remaining principle together with service tax towards the foreclosure charges of the loan. Besides offering the happiness of owning a home, a home loan offers tax exemption on the principal and interest paid over a fiscal period.
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