Buying a home involves several tasks, such as selecting the right neighborhood, choosing the right developer and designs within the budget, including finding a suitable financial institution for a home loan. This process can be demanding and complicated. With the increasing number of working professionals in big cities like Mumbai, many urban Indians are buying their first property and opting for home loans. However, not everyone is familiar with the home loan process, resulting in incomplete loan forms and borrowers struggling to repay their debts. To address this issue, a comprehensive guide on how to get a first-time home buyer’s property loan is here.
Basics of purchasing a property:
To buy your dream home in Mumbai, you may find it challenging to navigate the process of purchasing a property, especially if it’s your first time. In today’s world, where a fluctuating stock market heavily influences the global economy, it’s essential to have a good understanding of how home financing works in such circumstances.
Amidst the plethora of online guides aimed at easing the home loan process, a significant portion may prove ineffective. This ineffectiveness may be due to their inadequate provision of concise and pertinent information. However, you can trust this page to provide you with genuine and helpful guidance. Gain a comprehensive understanding of home loans covering everything from the mundane to the magnificent, through meticulous research that encompasses even the intricacies of interest rates.
Important factors to consider before applying for a loan:
Before applying for a loan to purchase a property, it is important to consider certain factors related to the financial institution or bank you plan to approach. These factors can help ensure that the loan process goes smoothly and that you are able to secure the necessary funds.
1. Monthly Disposable Income and Loan Eligibility:
Financial institutions and banks usually consider only half of the applicant’s disposable income as available for loan repayment. Therefore, having a higher monthly disposable income can increase your eligibility for a larger loan amount.
2. Static or Volatile Home Loan Rates:
Home loan rates can be static or volatile, you need to communicate with your banker about the preferred choice.
3. Down Payment and Financing the Property’s Value:
Typically, lenders require borrowers to make a down payment of 10-20 per cent of the home’s purchase price, while the remaining 80-90 per cent of the property’s value is financed by the lender. It’s important to note that this financed amount may also cover additional fees such as registration, transfer, and stamp duty charges.
4. Additional Fees to Consider When Obtaining a Home Loan:
When obtaining a home loan, there may be additional fees to consider such as processing fees, technical evaluation fees for high-property loan values, and charges for legal document review. However, some lenders may offer waivers for these fees, which depend on the lender you choose.
5. Obtaining a Statement for Tax Benefits:
Towards the end of the fiscal year, it is feasible to obtain a statement showing the amount paid towards the loan and the interest paid on the loan amount. This statement can be used for tax purposes to claim benefits.
6. Pre-Closure of Home Loan and Charges Incurred:
Pre-closure of the loan before its tenure period is very much possible. In the case of volatile interest rates, there will be no additional charges incurred. However, if the loan has a fixed interest rate, there may be a deduction of some amount for pre-closure.
Essential documents required to avail a home loan:
Almost all nationalized and private banks provide loans for all types of properties. What’s necessary is to understand the documentation involved and the steps that are essential. Say, for example, you are looking for a home loan in Mumbai. You would need to collate certain important documents as listed below:
- Identity proof
- Age Proof
- Address proof
- Proof of educational/ professional qualifications
- Pan card
- Bank statements
- Proof of income
- Employment details
- Property details.
Considering Mumbai’s high property prices and intricate regulations, the home loan process can be daunting for first-time home buyers. Seeking guidance from a reliable and reputable property developer such as Runwal Group, known for their trustworthiness and investment potential, could prove to be a valuable decision.
Established in the year 1978, they have a track record of delivering over 50 landmark projects in the past 4 decades. Along with developing top-class residential projects with gated communities and lifestyle amenities, Runwal Group in Mumbai is also a pioneer in developing iconic malls like R City and R Mall in Mumbai.
Mumbai is a difficult city to buy real estate in, it needs proper research, guidance and information. This home loan guide provides valuable information on the essential factors to consider when applying for a home loan, such as eligibility, down payments, additional fees, and tax benefits.
Additionally, it highlights the necessary documents required to avail yourself of a home loan from financial institutions or banks. For those looking to invest in properties in Mumbai, Runwal Group happens to be the right choice that offers thoughtfully designed homes with luxurious amenities. Apart from this, Runwal Group comes with a rich legacy of over 4 decades of developing landmark projects in Mumbai.