Many people apply for a Home Loan for their dream home but don’t land up with low Home Loan interest rates. You can achieve it as you read on some of the vital tips to secure it today!
For most of the housing loan borrowers, Home Loan application and EMIs payment every month means a huge cash outflows. As a result, any reduction in the Home Loan interest rates not only provides relief but even help you save money.
Considering a loan for home, but do not want your EMIs to eat up your monthly savings? Help is here in the form of some vital tips to get lower Home Loan interest rates and trim down the monthly EMI outflow:
The rule is simple to follow – the higher your CIBIL score, the lower your housing loan interest rates. You must know that the lenders offer the best housing loan interest rates to people with a CIBIL score of 750 or more out of 900. If you have a low score, your rate of interest will go up. Thus, if you want to avail affordable housing loan interest rates, you must take all measures to first improve your CIBIL score. You can achieve this by paying your outstanding on credit cards before the due date and if not full, at least pay the smallest amount due and keep a healthy score.
Make a Higher Down Payment
Always ensure to make a high down payment so that you can settle for a lower principal when applying for a loan for home. Thus, the smaller the principal, the lower the Home Loan rate of interest and lesser the EMIs. The general rule is that you should pay 20% of the total cost of your home as the down payment to grab affordable Home Loan interest rates.
Go For a Longer Tenure
Did you know if you opt for a longer tenure, you will end will smaller EMIs since the principal amount and Home Loan interest rate gets spread up over a large number of months? If you want to have a less interest rate, it would be better to go for longer loan duration.
Negotiate With the Creditor
If you are an old customer associated with the lender, you can negotiate a better deal based on your past performance. If you have always made EMIs on time and other fees to the lender, you must work out a deal in which you get a low Home Loan interest rate.
Employment Stability Helps
Home Loan creditors give priority to borrowers who are in a steady employment for at least two years. If you are not working for a long time or switch jobs, you won’t be able to get a low interest rate for Home Loan. Thus, try to balance things with a consistency.
Things to Know Before Applying For a Home Loan
Home Loan Cover and Down Payment
- You won’t get more than 90% of your total cost of the home from a lender as the loan
- As per your savings and other resources , you pay the down payment towards your home
- Age, income, property locations forms vital factors for your Home Loan amount that a lender will disburse
Are you financially stable?
- A Home Loan EMI is up to 35-45% of your salary
- By using an Home Loan EMI calculator, you can find out if you are suitable to pay EMIs
- A loan default will negatively impact your CIBIL or credit score