Home loan installments are required to be paid on time by the borrower to avoid getting penalized or getting the credit score reduced. Having proper financial planning is necessary while availing the home loans. Better financial planning leads to proper repayment of loans and thus can help an individual become debt-free on time and get the CIBIL score improved. The amount required for repaying home loans EMI should be kept aside from the monthly salary to pay it on time. Also if required the borrower should reduce miscellaneous expenses in case of the funds are found to be insufficient to repay the installments. The funds gained extra like incentives, the bonus should be invested in financial instruments to gain higher wealth which later can be used for the repayment of the installments. The borrower can even pay higher installments in case of increment received from the job and thus can plan to become early debt-free and save money on interest repayment as most of the banks provide a rebate on the early repayment of higher installments. The borrower should mark in the digital calendar or the printed ones the reminder to pay the installments on time to not miss the deadline or also can sign on ECS mandate for the auto-debit of the loans.
The borrower can avail loans from any of the banks or an NBFC which provides attractive interest rates to the home loan borrowers and also the ones who charge lesser processing fees to the lenders. By availing of the loans at lower interest rates the borrower can reduce the liability of monthly installments. Also availing of joint loans if two persons are working from the same family is a better option. Taking joint loans helps reduce the liability on the single borrower. Also, dual tax benefits can be availed by the borrowers by availing loans on a joint name basis. Having a stable source of income is also very much necessary before availing of loans. The borrower before availing of loans should ensure that they should have a stable job and also a stable source of income in case of either job or business. The employment should be stable where the job losses should be almost nil or in the case of self-employed, the business should be running successfully so that there should be no obstacle in repayment of loans. Having sufficient savings in a bank account can also reduce the botheration of the borrower for the installment repayment.
Overhead charges which you should be aware of
- Processing fees:
The bank charges the processing fees to the loan applicants for the loan sanction as the borrower needs to pay like 1% of the loan amount as processing fees or else Rs.10,000 whichever is lower. The banks charge the processing fees as part of the recovery process or else for the third-party verification of the property documents for which the lender incurs the cost for the verification. Every lender charges processing fees of 0.25-1% of the loan amount as part of the recovery of the loans.
- Amenities charges:
The property buyer may require paying extra for the amenities as the amenities require land and also construction cost is required. The cost of the land and the construction cost is divided amongst the property buyers and along with the profit the bank incurs the cost of the project.
- Brokerage charges:
The property buyer may sometimes have to pay brokerage charges to the agent for the purchase of the property. The broker usually charges a brokerage of 1% to the buyer and 1% from the seller on the transaction charges.
- Registration and stamp duty charges:
The property buyer has to pay the registration, stamp duty, and GST which the property buyer has to pay beyond the per square feet rate which the property has to pay on the actual transactions or else on the ready reckoned rates.
The property buyer should assume many such charges which may be charged to the property buyer as the cost is charged over and above for the property rate as per the per square feet rate. Also, the loan sanctioning for the property should be done according to the total estimated value of the property only. In case the over and above cost required for the renovation bank does not approve the loan amount for this purpose thus the property buyers may have to take separate loans for the renovation purpose.