Property rates in Mumbai are reaching their peak, which makes it almost impossible to buy your dream house in one go. As Wadala emerges as one of the prime residential locations in Mumbai, Wadala property prices are becoming steeper by the day. This leaves you with no alternative but to take a home loan to fulfill your aspirations.
Taking a home loan is one of the biggest decisions of your life because of the amount of money involved. Though banks are eager to lend, getting your loan sanctioned can sometimes get very tedious. This is why you should be well acquainted with the various loan procedures to avoid any nasty surprises at a later stage. Before signing the loan documents you must know the following:
- Can you afford the EMI? You should always finalize on an EMI amount depending on your monthly income. In fact, plan your EMI such that it does not exceed 40 – 45% of your monthly income to avoid the risk of becoming a defaulter.
- Do you have the money for down payment? No bank will give you a 100% loan. Usually, 20-25% of the home value has to be paid in the beginning as a lump sum. Therefore, proceed with a home loan, only if you can afford to pay the down payment of the property. However, if it exceeds your expectation, you can consider re-working on your budget or look at a more affordable property.
- What is your loan tenure? If your loan amount is higher than your EMI affordability, you can opt for an extended tenure. The longer tenure will reduce your monthly EMI payout but will charge you a higher interest. On the other hand, choosing a shorter tenure will increase your monthly EMI payout but you can save up on the interest amount tremendously.
- Is your home loan insured? No sooner do you get a home loan, you should get it insured so that in the event of an unfortunate situation, your family will still be able to live in the house and the insurance company will pay out the pending loan amount.
If you are considering buying a 2BHK in Mumbai, do not rush into taking a home loan without verifying all the details. Consider taking quotes from 2-3 banks and compare the aforementioned facts, before zeroing down on one.