Now that there are lenders that have lowered their home loan interest rates to as low as 6.5%, homebuyers are eagerly looking to apply for home loan plans. This comes as no surprise as these rates have reached their lowest level in almost 15 years, which is why buying a house now seems like the right decision to make.
But should borrowers buy houses simply based on the interest rates of their home loans? Of course, there are other factors that are equally important that need to be considered before going for a home loan. Sure, the falling interest rates are a great incentive to apply for home loan.
However, it is also necessary to maintain the following factors:
- Decent credit score
No matter what type of loan you go for or which lender is offering the loan, your credit score is always going to be reviewed before the loan approval. If the credit score is low, there are high chances of either the loan application getting rejected or getting stuck with a high interest rate, which defeats the purpose since you were looking to take advantage of the current low home loan rate.
- Stable flow of income
Even though the home loan interest rate might have reached the lowest level it has in years, it is very important to consider job stability before taking a home loan. Many people have lost their jobs and got their incomes affected due to the pandemic, and you need to make sure that your employment is secure with a stable flow of income before applying for such a loan.
- Ability to cover down payment
If the loan amount is between the ranges of Rs 30-75 lakh, most lenders will cover 90% of the property cost. If the loan amount is more than Rs 75 lakh, lenders will only cover 80% of the property cost. The remaining expenses will have to be covered from your own pocket. It is very important to have sufficient savings so that you can cover the down payment for the house you are planning on buying.
- Awareness of existing debt obligation
One common mistake that many borrowers make is only considering the home loan EMIs as expenses from their monthly income. However, you also need to calculate the rest of the debt obligations too while counting deductions from the monthly income. Once you calculate all the expenses, it will give you a clear idea of whether the home loan is affordable. It is always advisable to use a home loan calculator to understand the exact amount of the monthly instalments. Also, make sure to have enough savings to take care of any medical emergencies to pay for immediate hospitalisation.
Once you have considered the above-mentioned points, feel free to go ahead and take advantage of the low housing loan interest rate of the current market. Apply for a home loan, today.