Things to consider before buying Home
Home is one of the biggest asset for most of us, we indulge in our lifetime. Hence, it must be a thoughtful decision and must be made with careful considerations. It also leads one to borrow money and that loan amount remains there for almost half of your lifetime in your repayment list.
Hence it’s not only an emotional decision but also a financial decision. Here are some aspects one must consider before investing into buying a home.
While you insist on buying a home, you need a huge amount of cash which either you may have in your savings account or like 80% of other individuals, you must be considering borrowing money.
The government also have very favorable home loan offers currently floating in the market and yes if you could afford the repayment of the amount, every month for the next 30 years of your life, then why not.
Check your credit score
First thing you must consider before applying for a home loan is to check your credit score. This may not only impact the approval of your loan but will also impact the overall cost of your loan.
Just by improving it to its best, one can easily save a lot of amount on loan closure. A good credit score means lots of loan options and helps you negotiate with your preferred lender. Read our article on 1. How to improve the CIBIL Score? To improve your credit scores.
Get a preapproved loan
Having a pre-approved home loan could help you grab your preferred location and help you cut down on your choices. A pre-approved loan is different from pre-qualification. In pre-qualification, you don’t have surety of disbursal of loan however under the pre-approved loan, you are certain to get the loan offered.
This puts you in a positive situation in front of your homeowner that you won’t delay or decline the offer in terms of changing financial position.
Negotiate with your lender
Try to negotiate with your lenders on your home loan amounts and terms. Your lender may not be offering you the best loan option applicable to your situation, hence its always good to evaluate all the option you have in the market and to choose the best and most secure loan available.
Most people just approach their banks and take whatever they are offering. However, the lending market is not just restricted to your bank and may have a lot more lucrative and less expensive loan options available.
Also, when you have researched about all the loan options, you can as well negotiate with your bank to get the most favorable options while you prefer remaining with them.
Borrow as per your capacity
While applying for a home loan, one must know the repayment amount they can payoff easily every month without any further hardship.
It is always advised to hire a financial consultant to help you make a wise decision about your home loan by evaluating your current assets and liabilities and how they may change further in the coming loan period.
Like maybe you can afford a re-payment now, but you have a plan to get married in the next 2 years and then start your family in the next 5 years which may add up to your current liabilities. A financial analyst will take all this into consideration and help you make a wise decision.