Planning to buy your dream home? 7 home loan tips for first-time borrowers

Planning to buy your dream home? 7 home loan tips for first-time borrowers 

New Delhi: For the first time home buyers, the real estate scenario appears to be conducive enough to take advantage of the available deals and offers. If you have already identified your home and looking for a home loan, there are a few tips that may come in handy to you. These home loan tips will help you get not only the best interest rate but also keep the overall interest cost low till the end of the home loan tenure.

1. Strengthen CIBIL score 
   To boost your eligibility for the home loan, strengthen your CIBIL score. It tells how good you are at paying installments, your previous dues, investment and much you can easily repay. To keep a good CIBIL score, a person must have a clear financial record. Your credit card payment should not be left unpaid.
2. Negotiate rate of interest
   Lenders mostly define the interest rate in a minimum and maximum range, the actual rate charged depends on your eligibility criterion. As a borrower you have the ability to negotiate a better interest rate. Financial advisers say you can do this not just by comparing your loan options, but also by improving your eligibility by adding a co-borrower and combining the co-borrower’s income with your own.
3. Opt for a home loan only after comparing
   Before you zero in on a loan, compare between the different loan products available in the market. Look at the equated monthly installments (EMIs), the interest rates, the processing fee and other related charges to choose the perfect loan. These days home loans offered online, you can always explore with a few clicks. Look at the base rate, the margin offered, what is the maximum tenure offered, and how is the eligibility calculated and most importantly whether a property similar to yours has been funded by this lender earlier.
4. Understand your borrowing capacity
   People often decide to pay high EMIs thinking the loan load would come down with time due to annual increases in their income. However, their incomes may or may not rise with time. Therefore, they must borrow to the limit where paying EMIs would not stretch their finances.
5. Co-borrow with a spouse
   The lowest interest rates are often reserved for female borrowers. It’s very common for home-buyers to co-borrow with their wives to avail the lowest rate.
6. Consider a long loan tenure
   As home loans are large investments and the nature of the loans are long-term, new home loan borrowers should plan their home purchases with the understanding of their current & future commitments while planning their EMIs. As your income increases, consider pre-paying or increasing your EMIs to close out your loan sooner.
7. Bargain on the interest rates
   Home loan rates are at historic lows, and the market is full of attractive offers. You must compare your choices before taking a loan. Even after taking the loan, you should keep an eye on interest rates to ensure you are getting a good deal from your lender. If not, consider speaking to your lender or even transferring to another lender giving you a better deal.