Are you looking for the best bank to get a home loan? BankBazaar can help you track your loan application easily and calculate your monthly payments with our EMI calculator. Interest rates, processing fees, and other parameters vary from lender to lender. To get a loan approved, you need to provide proof of identity, address, income documents, bank statements, and proof of home purchase. Pradhan Mantri Awas Yojana (PMAY) provides an interest subsidy of 6.5% on mortgage loans.
If your loan application is rejected, you can always reapply but there are a few things to consider first. If you have a low credit score, it is recommended that you review your credit rating and credit report before applying for a loan. You can get your credit rating together with the credit report on BankBazaar. If the amount of the loan requested exceeds the amount of your eligible loan, you may consider increasing the down payment on your home loan to lower the loan amount.
Having too many loans in progress will not only affect your personal finances but also your ability to pay, so it is recommended to liquidate ongoing loans before applying for a mortgage loan. Unstable employment can sometimes have a negative impact on your loan application, so it is best to have stable employment with an institution recognized in your application. You can always consult with banks' customer relations executives to help you with proper loan documentation. A mortgage loan is a secured loan taken from a financial institution for the purpose of buying residential property. You can apply for a mortgage loan to buy a house or apartment ready to move in or one that is under construction.
Mortgage loans can be requested from both banks and non-bank financial companies (NBFC). These have varying interest rates that are often linked to your credit rating. Mortgage loans are usually valid for up to 30 years and must be repaid as equivalent monthly installments. You can also get tax deductions on the principal and interest component of your mortgage loan under Section 80C and Section 24, respectively, of the Income Tax Act. It usually takes 3 to 4 weeks for the mortgage loan to be sanctioned but pre-approval doesn't always mean that your loan will be disbursed immediately and depends on certain external and internal factors. Interest rates associated with fixed-rate loans remain unchanged throughout the life of the loan while interest rates applicable to variable-rate loans may be revised from time to time based on key RBI policy rates.
Matched monthly installments may increase or decrease based on the prevailing RBI rates for floating rate type loans. You can choose to prepay the outstanding amount of your loan either in part or in full before the end of the loan term. While banks do not charge any prepayment fees for variable-rate loans, fixed-rate mortgage loans carry a penalty of up to 2% of the loan amount if paid in advance by refinancing. Tax benefits are available on the interest and principal component paid against your home loan under Section 80C and Section 24, respectively, of the Income Tax Act. The co-applicant can be an immediate family member such as their spouse, parents, or even older children. It is also mandatory that all co-owners of the property be co-applicants when applying for a loan but the co-applicant does not need to be a co-owner. Pre-EMI is defined as the interest that will be paid to the loan provider until the full loan amount is disbursed.
Pre-EMI is paid monthly until the last disbursement after which regular EMI comprising principal and interest components will be applied. Marginal cost of fund-based lending rate is the benchmark rate set by a lending institution below which it cannot provide loans.