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Mistakes that one should avoid while availing a home loan
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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A home loan unmistakably is a good option to fund your dream home. However, you should be careful and avoid making mistakes in the process of availing the loan and during its tenure. Here are some mistakes that you must avoid, to make your home loan experience, a pleasant one.
Falling for bloated promises by the lender
As the home loan market is very competitive, representatives of lenders can make exaggerated promises to sell the loan. You must be careful not to get carried away by overrated claims made by them. It is advisable to take all the offers provided by the lender in print, leaving no room for regrets later.
Taking hasty decisions
Although interest rates offered by banks and private lending institutions are more or less similar, even a fractional discount is worth considering provided there are no strings attached to it. You must thoroughly study the housing loan market and settle for the best interest rate that is viable for you. Be patient to check all the offers available and do not take a hasty decision.
Defaulting during repayment
When you avail a home loan, you are expected to repay in Equated Monthly Installments (EMIs). You need to be careful while deciding the loan amount. Do not go overboard. Decide your home loan amount only after estimating your repayment capacity. The reason being, that if you default for want of adequate fund in your bank, there will be a penalty imposed on you. That apart, even your credit score will face a negative impact.
Making cash payments
Always make sure that you make payments either electronically or by cheque. For certain requirements (like franking, lawyer’s fee etc.) the concerned party/brokers may demand cash payments which you may make but against proper receipts. However, refrain from making major payments in cash.
Delaying submission of documents
There are mandatory documents pertaining to Aadhaar, PAN details, Income tax details etc. which you will need to produce at the time of applying for a home loan. Procure all these earnestly and submit them on time. If you fail to do so, your loan approval process can be delayed.
Proper planning coupled with a cautious approach can help you to avoid mistakes while availing a home loan. Do follow them and let your home buying experience be free from hassles.
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