6 Important Steps Before Availing a Home Loan in India | AU Small Finance Bank
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Important Steps Before Availing a Home Loan in India

    Purchasing a new home is a dream for many Indians. And most people rely on a Home Loan to make the dream of ‘stepping into their own home’ a reality. A Home Loan is a financing option that you can use to fulfill your dream of buying a new home without the need to strain your finances. 

    As a prospective Home Loan buyer, you need to be judicious when applying for the loan as it is a long-term commitment & takes away a portion of your income in the years to come. Keep a few things in mind before taking a Home Loan in India.

     
    • Decide the Budget

    Once you decide to buy a home that fits your budget, the first step is to know how much Home Loan you would require from a Bank. Also, it is always beneficial to make maximum down payment so that the cost of borrowing reduces. 

    Make sure to analyse your monthly expenses like utility bills, kids' school fees, travel, and other miscellaneous costs. This will help you understand your borrowing capacity and let you know the Home Loan EMI Outgoing.

     
    • Check Home Loan Eligibility

    The next step is to check for Home Loan eligibility, which lets you know how much loan amount you can get from a Bank. This is evaluated after the bank assesses various factors such as credit score, annual income, repayment capacity, income tax returns, job security, and the number of dependent family members. 

    If you are looking for a higher loan amount, you can opt for a co-applicant for the Home Loan. The co-applicant/s can be your close family members, including your spouse, sibling, or parent. All co-owners need to be co-applicants for a Home Loan.

    Also Read: - 6 Things that Reflect in your Credit Report

     
    • Location of Home

    The property rates are soaring everywhere in India, and your home's location directly affects the cost of the Housing Loan. For instance, buying an apartment in a prime locality with several amenities and good infrastructure is likely to invite high Home Loan interest rates. 

     
    • Tenure of the Loan

    A Home Loan has a longer tenure that stretches up to 30 years. So, before you apply for a Home Loan, evaluate the loan term as it is interlinked to the EMI component. If you select a longer repayment cycle, it is easy to make Home Loan EMI payments affordable; however, the interest rates would be high. Similarly, a shorter Home Loan tenure will require you to pay higher EMIs, but the interest would be lower.

     
    • Builder's Reputation

    Always choose a reputed builder. Real estate companies or builders with ISO 9001:2008 can be trusted for property buying. But this is just one of the aspects. It is always better to buy a property from an established builder. Even banks prefer approving a Home Loan application if it is a reputed builder. 

     
    • Legal Paperwork

    Home buyers should check whether the builder has all the approvals from the government authorities to construct a property. Regarding legal paperwork, you must check for Occupancy Certificate, Sale Deed, Builder Approval Plan, Allotment Letter, Sale & Purchase Agreement, and other essential ones. 

     

    Other Home Loans Available with AU Small Finance Bank

    If you plan to buy a home, you can apply directly with AU Small Finance Bank. Here, you can avail different types of Home Loans for a variety of purposes, including the purchase of a new home, home renovation or improvement loan, home construction, land purchase + construction, top-up loan, and balance transfer of a running Home Loan to AU Small Finance Bank.

    To apply for a Home Loan with us, you could visit the nearest branch of AU Small Finance Bank and submit your Home Loan application.


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