Askketul: Gist of Home Loan process

Dream is the engine which keeps human machine going on. Dream can be related to commodity, family, home, travel etc. Survey has proved that barring family, “Dream home” stays on the top of human priority.

The happy note is – “Dream Home” can be achieved without taking any social obligation. It means a home loan can help you in reaching to you “Dream Home”. If you are person who are willing to get a home loan then you have to keep these set of points in your mind.

Identify which kind of home loan you are going for. Home loans are available in different forms such as basic variable, standard variable, fixed rate, professional package, commercial and line of credit.
After choosing the comfortable home loan type, you need to follow a thumb rule. The monthly installments including the current commitments like car or personal loans should not exceed one-third of your monthly salary. It is always advisable to keep the installments below the one-third limit or the chance of losing the home is high at critical circumstances.
Fixed interest rates will provide stability in your monthly installments against the fluctuating financing cost where the variable interest rates change your installment amount.
Banks usually finance 90% of the property and the remaining 10% should be in your hand in cash for the down payment. Normally 2% - 3% of the purchase price has to be paid as booking or earnest fee.
If you are going to purchase a home then 7% - 8% of the purchase price has to be paid upon signing the sale and purchase agreement.
In addition to the above stamp duties and legal fees has to be paid for your loan agreement and sale and purchase agreement.
Besides the above payments monthly service charges if it’s an apartment, quit rent and deposits for utilities has to be paid before you get the key of your home in your hand.

These are the gist of things that has to be noted down before going for a home loan.

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Jan 23, 2011

Gist of Home Loan process

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