Buying your first home is like realizing your long cherished dream. You must however previously configure the arrangement of home loans which you are using as a succor for financing the deal. If this is your first home then you certainly do not have any home equity (from previous home) to ease out finance. Those who buy a second home often use equity of first home to ensure better packages of home loans.
Fulfill the essentials
Equity or no equity, you can avail a superb package if you pass some of the criterions of providers. Firstly, you need to possess a decent credit report. This means that your overall unsecured debt should be within manageable proportions. This is a fairly important aspect. Those who provide home loans wish to pre-assess whether your financial health is sound enough to pay for the mortgages over a long period of time. Of course, it helps if you have a streamlined flow of income.
Select your type
Spread over a fairly stretched tenure, easy interest rates mean that your monthly mortgage will be pretty manageable. Interest rates are generally worked out on a fixed or a floating rate. The latter is subject to change with the market scenario and at times it may result in paying mortgage for an extended tenure. As a first home buyer, you must make sure you are doing worthy comparisons and researches about home loans beforehand.
There is a brilliant option available for you as first hoe buyer. You can go for relief home loans or honeymoon loans. Here, you are given great leverage (exceptionally less rates) during initial 6 months to a year. You can plug all holes and get in a position wherein you can pay their normal rates after that period.
Be good with additional details
You must find out as much about upfront fee for loan as possible. Lending companies provide up to 90 percent of money required to purchase a home. However, overall saving is also expected to be higher if your lump sum is about 30 percent of the total deal. Cost of processing home loans is another aspect which needs a lot of introspection.
Ideally, such an amount should be about the 0.50 percent mark excluding the service tax. Next in line is administrative fee for the loanThis fee is being charged by banks for forwarding the loan amount. As a first time buyer, you should find out in detail about those banks which do not charge a single rupee. Banks may also charge some amount for legally verifying your property.
Avoid the penalty
Lending agencies like receiving your EMI payments on time. There are chances that a penalty may be levied on you for defaulting on the monthly mortgage payment; this amount might be in range of 2 to 3 percent of EMI amount. There are various other prerequisites that you should find out prior to cutting your first home deal. Internet can be an ideal solution to gather a wide range of information for home loans.