The credit score refers to a number that indicates your credibility against the loan payments. It is in three digits, usually between 300 and 850 points. It is a strategic tool for bankers, lenders, and financial institutions to critically analyze your loan repayment behavior based on the acquired credit score.
The higher credit score indicates a healthy credit account, and a lower credit score shows a poor credit history. If you don’t have any idea about it, you can ask from a trusted real estate consultant in your town.
Thus, it is quite important for a home buyer to maintain a healthy credit score who is seeking to take the home loan. If you ignore your credit score, you may have to face challenges while asking for a home loan from the bank. The rent payment app is a new trend in the real estate market.
The Role Of Credit Score For Home Loans
Credit score plays a vital role for a home loan. It doesn’t only build your financial credibility, but it also helps you work out a profitable home loan deal with the bank. It has been analyzed that if someone has a credit score of 700, it is considered to be a good score. But if your score is 750 and above, banks consider it a healthy account, and maximum banks will be ready to offer you a good home loan deal with lower interest rates.
Complete Guide For The First-Time Home Buyers Looking For Home Loans
If you are a first-time property buyer, you need to be careful and prepared for the home loan process. Many buyers struggle while applying for a home loan as they are unaware of the documentation, role of the credit score, type of home loan needed, and other related factors. Let’s discuss the complete guide for first-time buyers seeking home loans.
- Setting A Budget
It is recommended that if you are a first-time property buyer, you must determine your earning potential and the budget you can comfortably spend to repay the home loan EMIs. It will help you avoid any unwanted circumstances and missing EMIs. Therefore, you must set a viable budget for the home purchase.
- Mind Your Credit Score
As we have already discussed above that credit score plays a crucial role in deciding upon the amount of home loan you will be eligible for. However, you can negotiate a beneficial home loan deal from the bank if you maintain a healthy credit score of 700–800 points. It can be achieved by repaying the loan amount in a timely manner.
- More Down Payment Can Favor The Home Loan
It is suggested that one should always save for the down payment if your plan is to buy a home or a property. More down payment at the time of home purchase demands a lower home loan. It then favors you with easy EMI options, and better loan schemes. You can save for the down payments by investing in financial products like; FD (Fixed Deposit), MF (Mutual Funds), and RD (Recurring Deposit).
- Know About Home Loan Documentation
Buyers often get confused while preparing for the home loan documentation. It is necessary for every buyer to attain basic knowledge of the documents required for a home loan, and the process. It will save you time & keep you away from hassles.
- Cross-Check & Compare The Interest Rates
Once you have set the budget, you know about your credit score, and you have a sound knowledge of the documentation process, you can get in touch with different banks and ask about the interest rates and tenure. Here, you can compare between them to choose the favourable one.
- Decide On The Home Loan Tenure
Once you have compared the interest rates and tenure, you need to carefully decide upon the home loan tenure. The standard tenure is for 20 years. However, you can work out the home loan for 15 years or 30 years.
- Determine The Home Loan Amount
You should consider your financial capabilities and the property value while determining the home loan amount needed. Most home loan providers offer 80% to 85% of the property’s value. In some exceptional cases, one can work out the 90% loan amount.
- Check For The Processing Fee & Other Hidden Charges
Last but not the least, check for the processing fee and other hidden charges, if applicable. Don’t overlook the processing fees and other charges as it can be a surprising factor for you while applying for the home and final registration.
Conclusion
You can invest in a premium real estate project like Motiaz Harmony Greens, and follow the above process to work out a profitable home loan deal with a lower interest rate and easy EMI options. Remember, always determine the home loan tenure, and finalize it as per your financial conditions and repayment capabilities.