Buying a house is undoubtedly one of the most significant undertakings of one’s life and requires meticulous planning. Herein, the timing of purchasing a house plays a crucial role. Owing to the current economic turmoil, the perception of owning a property has significantly changed among the masses.
A home loan has turned out to be a vital source to finance this housing requirement. That’s why, at this point, the home loan sector is once again abuzz with affordable home loan interest rates and waivers for processing fees.
However, potential borrowers must keep in mind that they should be responsible to repay their loan as that would boost their credit scores and allow them to take advantage of several offers extended by financial institutions.
For instance, lending institutions provide pre-approved offers, simplifying and expediting the application process. These offers are available on multiple credits like home loans, loans against property, and more. Individuals can check their pre-approved offer by providing a few essential details, including phone number and name.
Using an effective financial planning tool like a house loan calculator to compute loan instalment or EMI applicable to this loan would enable one to stay in control of their repayments. This would, in turn, let one repay the loan punctually.
Closer look at the present favourable situation of availing a home loan
Due to the present economic situation, financial institutions are providing housing loans at low rates of interest. One of the reasons driving this fact is the low repo rate set by the Reserve Bank of India.
The repo rate plays a major role in determining these rates. Any change in the key policy rate results in a relative hike or dip in the corresponding interest rate. As of now, RBI has decided to maintain its accommodative stance about the repo rate on account of the current economic predicament.
Thus, with cheap rates of interest, this turns out to be a highly favourable time to opt for a home loan and purchase their dream house. The low interest rates would facilitate substantial savings. The resulting savings from the lowered EMI can be further used to service a top-up loan, which also comes at a low rate of interest.
Alternatively, one can consider purchasing a larger house without a rise in the EMI outflow they had planned.
The present home loan circumstances also bring another major benefit. Potential borrowers can opt for a loan with a fixed interest rate. As a floating rate is a volatile option, opting for a home loan with a fixed rate can prove to be ideal now.
Nonetheless, potential borrowers must ensure that they have an adequate flow of income to repay the complete home loan EMI on or before the stipulated deadline.
Things to consider before purchasing a house
Firstly, the project should be a RERA or Real Estate Regulatory Authority registered one. Regarding the house, one must look into the developer’s credentials before making the purchase.
For a new project, one must ensure that concerned authorities approve of the layout plan. On the other hand, for secondary purchase, one must ensure to check through every document since the property was built. In case of unavailability of such documents, one must obtain a Non-Encumbrance Certificate.
For most home buyers, purchasing a home turns out to be a moment of a lifetime. To that end, a home loan and long-term financial commitment play a vital role. Considering the present home loan market situation, it can be inferred that it looks to be a buyer’s market to invest in and fulfil the dream of being a house owner.