Tips for new home buyers

Are you hunting for a home? A home loan helps you achieve peace of mind by providing you with one of the basic necessities of life – a roof over your head. But if you don’t exercise prudence wisely and take extra care while going through the process, a home loan can rob you of that very peace of mind. Here are a few quick tips that you should know before climbing onto the property ladder. These key tips could assist you choose the right home loan and save some money at the same time.

Market Research – Searching for the perfect home loan may seem hard work but if you do your homework and take your time, the whole thing will be a lot easier. Those hoping to climb onto the property ladder may be in for a bit of a shock – loan options are vast and can at first seem a little overwhelming. The key to getting the best deal on your loan – and that means the most sensible option, as well as the cheapest – is being armed with as much information as possible… so be prepared! Clear your doubts regarding the loan scheme before finalizing on anything.

Calculate the EMI – Estimate the amount of EMI that you can afford beforehand. Keep in mind your income and financial commitments to determine the amount of EMI you can pay before applying for a loan. Don’t make abrupt decisions on this one because if you get delayed on making repayments on time then it could be burdensome for you to pay penalties if you don’t have a stable income source. So, keep in mind the other aspects also that are worth to consider before you agree to take up the new loan and you’re your decision wisely.

Eligibility criterion – Having documents ready before you apply for a loan can speed up loan approval. A lender will consider your credit history; you must make sure you have paid all your credit cards and other loans timely to score good on eligibility. And if you have a clean record in your credit history for making payments on time, then you can use it as an asset when applying for a loan. Also, scrutinize the duration of your loan. If you prefer a long tenure loan then interest rate would be comparatively high and you will be bound to pay more overall.

Borrowing costs – When you apply for a loan, it’s mandatory to know about other additional charges that the lenders would add to the current home loan schemes. The lender may impose a range of administrative and service charges or processing fees. These additional charges will be considered under the sanctioned amount in your name and not considered under the amount that you take home. Before you agree any deal, you should examine the other charges that the lenders put into the scheme.

Study the fine print – Make sure you thoroughly read the home loan agreement documents with your bank or financial institutions. The lenders may acknowledge certain points to you but whatever is written on the paper will only be considered at the end. So, it would be appreciated to contribute some time on reading the documents to avoid any hassles later on. Get your queries cleared, if any, related to terms and conditions mentioned in the loan before signing your documents.

Learn more about credit history and its impact on your credit score at www.cibilconsultants.com

Source- Secondary

Joining a co-applicant in a home loan!

Are you aiming to avail a home loan? Will you like to relish substantial profits from it? Here’s your answer – joining hands for a bigger home loan. You can instantly apply for joint home loan by simply adding a co-applicant or co-borrower in your application of home loan. Let’s explore some terms about these loans which banks specify when co-applicants are added.

Loan eligibility

All banks allow two or more persons to jointly apply for a home loan. By applying along with a co-applicant, your eligibility increases and as a result, you can avail a higher loan amount. However, banks specify that only people with certain specified relationships like father and son, husband and wife, brothers are permitted to apply as co-applicants. Beyond these, other relationships are not permitted as co-applicants. Moreover, the co-applicant needs to have a regular source of income.

Between a co-owner and co-applicant

Co-applicant is a person who applies along with the borrower for a loan. A co-borrower along with the primary borrower accepts responsibility for repaying a debt. Infact, from a bank perspective, co-owners of a property should necessarily be co-applicants.

Husband and wife

One can include one’s spouse as a co-applicant for a home loan. His or her income will be added for determining the loan eligibility. The maximum tenure of the loan is determined based on the retirement age of the older partner. As per bank aspects, this is an ideal situation to have the husband/wife as co-applicant.

Father and son

The terms relevant to a father and son being co-applicants are thoroughly clear, if the applicant is the only son, he can jointly apply with his father with both the incomes being considered. The property should be in their names jointly and it does not matter who the main owner is. This is because in any case the son is the legal heir of the father’s property.

In case a person has two or more sons and if he wants to apply jointly with one of them, he should not be the main owner of the property. This is because, on his death, his children should inherit the property jointly and may cause an inheritance dispute. The father may only be taken as co-applicant and his income may be considered for the loan. He may be a co-owner or not own the property at all.

Unmarried daughter and father

An unmarried daughter can apply jointly with her father. However, the property should only be in the name of the daughter and the income of the father should not be considered. This is to avoid any legal complications on the subsequent marriage of the applicant.

Brothers and sisters

An applicant may apply with his brother provided they are currently staying together, and intend to do so in the new property as well. However, a brother cannot apply with his sister. Also, an applicant cannot have her sister as a co-applicant.

Documents

The documents needed for joint home loans are the same as any other home loan. The only difference is that here documents are needed from both applicant and co-applicant. General home loan documents needed are identity proof, address proof, salary slips and bank statements.

Taxation benefits

We all use home loans to save tax. Joint home loan tax benefits are an extension to the tax exemptions provided by home loans. In the case of joint home loans, applicant as well as co-applicant can enjoy tax benefit for the contributions towards the loan.

Visit www.cibilconsultants.com

Source-secondary

Joining hands worth for bigger loans

Due to the very nature of a home loan, which entails a large sum of money and long repayment tenure, a co-applicant works out to be a relatively significant corpus. Most home loan borrowers find it a daunting thought to imagining the way in which this huge burden of amount could in some way be reduced. Remember, your dear ones can commit you more than emotional support when you decide to go in a home loan..

Every lender grants two or more persons to jointly apply for a home loan. By applying along with a co-applicant, your eligibility increases and you can avail a higher loan amount. However, only people with certain specified relationships like father and son, husband and wife, brothers are authorized to apply as co-applicants. Besides these, other relationships are not allowed as co-applicants. Furthermore, the co-applicant requires having a regular source of income. All co-applicants are not enforced to co-own the property but if there are co-owners in a property then all of them need to be co-applicants. While choosing a co-applicant, confirm that his credit history is good with no loan debts.

Visit- www.cibilconsultants.com
Source: Secondary

Can you get house on rent if you have bad credit score ?

Nowadays, many people face the problem of bad credit. And with bad credit comes several problems from getting a job to financial transactions, to renting a home rather than buying a house. Credit score is not just looked at when you go for buying a loan but also when you go out to rent a house. But unlike when you go for buying a house, renting a house with bad credit is still manageable, if you know what you are up against.

For getting qualified to rent a house, you need to prove to the owner that your bad credit in no way would disqualify you as a bad tenant. So make sure that you prepare your credit before applying for renting a house.

Be prepared beforehand:
Try to clear up your credit as much as you can. Try to give the lender as much documentation you can to show you are now trying to improve your credit score. Try to establish a record of regular bill payments.

In the market for a long time:
Try to search for a house which has been in the market for a long time. These properties are usually in low demand for them being not in good localities or they are in need of renovation. Such low demand properties have less strict terms for renting and you can lend them easily.

Be honest about your bad credit status:
Naturally, we think that our bad credit won’t let us get accepted for the tenancy but there is no point in hiding your financial past for this, it would only backfire. If, later, the owner finds out about your bad credit, he may look at you like you are a risk since you are hiding stuff. Be honest to the owner that you have a bad credit but try to make him believe that you are now changing and striving to improve your credit score.

Large Deposit:
Always save beforehand for a large deposit. Since you have a bad credit, the lender might see you as a lender’s risk and ask for a hefty deposit. If not, you can use the same amount to make him take the decision in your favour. You can also use this deposit as a few months advance rent.

Research & Reference:
Search for an owner who doesn't run a credit score check. You’ll usually find such landlords in local classifieds as they are private and not big management companies. Get references from your previous landowners who could write good feedback about you and then you credit score won’t matter much. If the present owner sees good feedback about the duration of you stay, your payment record, then it would add value to your rent application despite the bad credit.

Source: Secondary