What suits their image.. The LION’s Den or The LOVE Nest- the fight doesn’t end between the newly married Rima and Manas. The search on websites, apps, newspaper ads and site visits was almost done. The discussions over coffee and drinks gradually took them to a more important topic- The budget, loan requirement and repayment processes. They knew they would need to take some bank loan but the mathematics seemed very difficult when they realised they would require 70% financing and which would take about 15 years to repay. They also realised as their monthly budget would leave them with less money in hand, a plan seemed necessary to tackle the issue of choosing the bank/ housing finance offers and monitor the repayment process carefully.
Rather than getting into the whole subject together in one go, I have decided to make three simple posts on the subject. 1. Preparation (Home Work), 2. Processes 3. Managing the repayment for smart benefits.
Prepare to get loan – Home Work
1. Keep at least last two years’ Form 16. (Tax return details)
2. Keep bank statement for last 1 year (minimum 6 months)
3. You may refer to #CIBIL website to check your credit score (higher the score, your negotiation power will be higher)
4. You have to fetch all your loan history and repayment record.
5. Once you decide your budget, remember bank will finance maximum upto 80-90% of the total amount. So, you have to be ready with the minimum down payment (10 – 20%)
6. If you are close to finalising the property, you may also apply for pre-approved loans. This come with various conditions as well as one need to closely look at.
7. Check for good offers in various websites and other websites for various offers on loan
8. Age – your current age is a factor for bank to consider interest rate negotiation, the preference is 24 -45. Higher the age risk factor for banks increase
9. Income – Bank/ institution not only finance upto 80-90% of the actual price, they also consider your present salary. For, eg. Certain bank can offer 20 times your monthly salary or 4 years of your annual income.
10. co-applicant – An earning co-applicant like wife/ father/ son can reduce the risk for the bank, also can give better tax benefits.
In the next post we will discuss about the processes