Owning a house is a dream that everyone sees. But most of the time, these dreams could exceed your budget; that’s when you need home loans. The home loans are mostly used for either buying a house or for constructing a new house, renovating the existing house, etc. The money is lent against new property, and it is repaid as monthly home loan EMIs along with interest.
The nature of the home loan can be commercial or personal. If you consecutively fail to pay the EMIs, then the issuer of the loan will get legal right to retrieve the remaining loan through selling the property.
What Are Different Types of Home Loans You Can Apply For?
Home Loans For Purchase: It is a type of loan that is taken for purchasing a house.
Joint Home Loans: These types of home loans require at least two people as partners for getting a home loan. The partners can be your spouse or your life partner.
Top-Up Home Loans: The top-up home loans mean borrowing extra money along with the existing home loan. They offer many banks to their customers at an attractive interest rate.
Balance Transfer Home Loans: It is used for transferring the remaining amount of home loan from one bank to another that offers you better interest rates and other facilities.
Different Type Of Interest Rates Available On Home Loans
There are two types of interest rate that you can get on home loans, which includes –
Fixed Interest Rates
These types of interest remain fixed throughout the tenure of the loans. The condition of the market doesn’t affect the rate of interest in these cases. However, these types of interest rates could prove to be beneficial if the market conditions change rapidly.
Floating Interest Rates
These types of loans keep on changing throughout the repayment period. Every bank has its own distinct MCLR which is connected with the link. It is a standard lending rate set by RBI, and these MCLR keeps on changing with the time that causes a change in interest rates.
How To Determine Whether You Are Eligible For Home Loans?
Before applying for home loans fort lauderdale fl, you should judge your eligibility that mainly depends on your capacity to repay. The repayment capacity is dependent on various factors like monthly income, assets, liabilities, expenses, etc. The bank closely scrutinizes your abilities to repay the loan before approval.
If you have a high disposable income each month, then the amount of loan you can get is also high. The bank generally assumes that almost 50% of your total disposable income could repay loans. The repayment period for the loan and interest rate are dependent on the total amount loan.
Documents You May Required For Applying For A Home Loan
- Properly filled home loan application
- Passport size photographs
- Identity proof like PAN Card, Passport, Voter ID, etc.
- A copy of an Aadhaar card
- Residential Proofs like electricity bills, passports, telephone bills, etc.
- You may also require to provide the last six months’ bank statements along with your salary receipts or ITR.
- If you are constructing a house, then in that case you need to provide a copy of the approved plan of construction or renovation.
- At last, you need to provide a NOC from the society or the builder.
These are documents that you have to prepare for applying for a home loan. It is crucial to arrange these documents as negligence could lead to the rejection of the loan application.