Buying a home is big decision financially and emotionally. At time the emotions and excitement overtakes the sensible decision making process and we make mistakes. Knowing what to expect goes a long way in helping to avoid mistakes.
Supriya and Anmol are newlyweds and are on the lookout for a dream home. The young couple have a precise picture of what they are looking for and have a few lakhs saved up for a down payment – for the rest they plan on taking a home loan. They have been asking family and friends for advice and researching online too. They now think they have enough information to go ahead and apply for the home loan. What they do not realise is that there are some rookie mistakes they are making which will prove to be quite expensive.
Not knowing your Cibil credit score
Your Cibil credit score is the basis on which the bank will be making its lending decisions. Seeing the view from the other end of the spectrum can help you realise the credit mistakes you have made in the past and you could take the time to correct them before applying for a home loan. A CIBIL score of 750 and above is ideal from the viewpoint of a lender.
Overstretching your budget
Often your dream home might not be one you can actually afford even with the aid of a home loan. While the bank might be willing to lend the required amount to you, the fact remains that you have to repay the loan via EMIs month after month. For a larger loan you will either have a higher EMI or a longer period. A higher EMI is a better option as you pay a lower interest over the years but it takes away a large portion of your disposable income month after month leaving little space for luxuries or unexpected expenses. It could be a path leading to temporary high interest loans and defaults – ending up with a poorer credit score.
with thanks : Yahoo News : LINK : for detailed news.
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