Increasing rate of first home loan buyers

Buying a new house is always a challenge that many first-hand buyers have to face. Food, shelter and clothing are deemed to be the three apex needs of human survival, so everyone is on the looks out for the perfect piece of shelter. When buying a new house, a lot of things should be taken care of, like location, the building itself, neighborhood and more. Since the 2010s more number of Indian have expressed their wishes to acquire their own house, but purchasing a house is a hassle by itself. The normal cost of a simple 1BHK can be around 7 lakhs to 18 lakhs in major cities in India. 

So, to provide assistance to potential buyers Banks offer Home Loans. Home Loans are different from other loans as they are not bound by any constant rate of interest. Any bank has the monopoly to change their rates of interest on loans within no-time. For example, If ABC Bank was providing Home Loans for 2% interest and a week ago and someone comes a week later, they might witness a difference in the rate of interest. Though most banks stick to a constant rate of interest to maintain their credibility, home loans in comparison to other loans tend to have steeper rates of Interest. Every home loan is sanctioned for a long period of time, usually 30 years, to provide the borrower enough time for repayment of the loan. 

Problems of Home loans 

Home loans are cumbersome than normal loans as one may apply for a home loan, but their home loan application needs bank verification which may not get instant clearance due to the increasing demand for home loans over the past decade. Since 2018 many banks have increased their rates of home loans, making it more exclusive for everyone to acquire. As more housing communities and chains of apartments have been erected, banks have harbored this chance to get the best out of the situation by increasing rates, which has affected both the buyers and the sellers.

Home loans or any other kind of loan depend on a person’s credit score, a person who has a below-average credit score may never get approval on their first try.

Remedies to the incurring problems 

If it is your maiden try to acquire a home loan, some key points should be kept in mind.

Choose a reliable bank

Choosing a proper bank to get home loans from is most important. One can simply check on the internet and browse among options and select the one that best suits the borrower. Borrowers should read the customer ratings and reviews, which provide an insight into the bank’s loaning structure.

Choose the interest rate wisely

Rate structures of banks should be thoroughly checked before thinking of loaning any amount. Many banks have fixed or fluctuating rates of interest. Fixed rates provide better clarity and assurance of loaning, whereas, fluctuating rates provide more time for repayment of the sum.

Do a background check of the property

Background checking of the property, which someone is pursuing to buy, is necessary. Banks don’t provide loans on building in gram panchayat areas or those which are built without an approved plan.

Other options

Gold loans provide instant funds without the hassle of submission of a home loan application and its verification and levies nearly no rate of interest and deposition fee.

Thus, it can be said home loans are a tough asset to get your hands on. But if you are trying to get your first loan, it is always better to do a complete analysis of the market before jumping into the pool of home loans.