Your investment decision majorly depends on your financial wellness. While opting for property investment, you have to also consider the other peripheral expenses like registration charges, legal advisor’s fees, stamp duty, etc.
While it’s considered a rightful act to utilize a share of your savings in buying a home, it’s also acceptable to apply for a housing loan to keep up your financial stability. Fund diversification plays an important role in bolstering your financial betterment. Thus, it would be best not to take the risk of employing all your savings to build future assets.
It naturally comes to everyone’s mind when is the appropriate time for applying for home loans. In today’s financial market, getting home loans is not such a challenging task. Where banks, NBFCs, and housing finance companies are waiting to offer highly facilitated home loans, you need to determine which one will best suit your interests.
If you feel doubtful about the right time to ask for a home loan, here are some instances when you can unarguably move forward with real estate investment.
- Opt for applying for home loans when you have gathered sufficient savings for instant payment
When you have enough savings to pay out the necessary down payment for buying a property, you need to apply for housing loans. While requesting bank loans, your maximum sanctioned loan to value ratio will be 90%. So, you should instantly make the rest of the payment for disbursing the loan amount. If you want to bring down your overburdening of EMI on home loans, it would be wise to make a higher percentage of the down payment.
- Consider taking a home loan when you have made all the repayment of the previous loans
To maintain a good track record in banking institutions, always repay your existing loans or credit cards within the due period. If you opt for a home loan and the existing credit card repayments or education loans, it will become an unnecessary headache for you. Moreover, the sanctioned amount will be much less than you could avail at different times.
Carrying so many loans simultaneously might face queries from financial institutions, and you will get loans at a much higher rate of interest. Therefore, wait for the time until you have made all your dues to increase your CIBIL score. This way, the bank will support you in getting a larger amount of home loan at a low-interest rate.
- Take home loans when you have years of work experience with a stable monthly income
Your eligibility for getting Home Loans will be favorable if you have been in service for long years and earn a fair amount of monthly salary with assured job stability. Always consider your EMI should not exceed 40% of your monthly salary.
If you opt for a loan where the EMI is higher than that, it will be considered a financial risk. Only take up a home loan if you can follow this financial calculation. If you instantly need a home loan where you have to pay EMI below 40% of your monthly salary, you are good to go.
Hence, you can understand how important it is to choose the right time to apply for a home loan to avoid any financial disaster.