Buying a home is once is a life time decision for majority of the borrowers and it would probably be one of the biggest asset you will create for yourself. Other than just hunting for a right property you also need to know what you should not be doing while arelooking for a Home loan.
Following are the six mistakes you should avoid while considering home loan:
- Not checking credit score: CIBIL is India’s leading credit rating agency. Ensure you pull out your personalized credit score or Cibil data before you start the process of home loan application. In fact we at CreditVidya.com advice people to pull out their personalized score periodically to ensure it if error free and there are no identity thefts. Please click here to find out how to pull your CIBIL Score. If you would like to get an estimate of your Cibil score, you can check out our FREE Score estimator.
- Applying for new credit: When you are planning to buy a new home, concentrate all you efforts on just your home loan at least six months before. Do not go shopping for personal loans and credit cards;If your prospective mortgage lenders find too many enquiries in your Cibil credit report while scrutinizing your mortgage application, your loan application may be rejected.
- Finalizing on bank without checking: While applying for a home loan, talk to your friends who have an ongoing loan. Talk to as many as possible. Check with them why they chose that particular bank. Check what offers each bank is offering and how are their services? Ensure you do a rigorous background check before you apply for a mortgage. This will help you save a lot in terms of money spent on tiny little things like foreclosure charges, legal charges, processing fee and the likes.
- Not considering pre-approval: Pre-approved loan is a benefit offered to you by your bank based on your relationship with your bank. This is usually beneficial in terms of saving time on loan processing. Since you already have a working commercial relationship with the bank, the bank knows your history. So things become a lot easier in processing your loan.
- Loan overleveraged: Just because someone is offering your higher value loan, do not take it. Check if you can afford the corresponding EMI. In fact if you can do with lower home loan, consider it. Increase your EMI and reduce the tenure of loan. That way you save money on interest. At CreditVidya, we work with many customers who are servicing their home loans. Our debt optimizations strategy on an average helps our customers save 2.3 lacs on their home loan debt. Take advantage of our FREE counseling services and call us at 022-4012-4545
- Signing without reading between lines: The loan documents are filled with legalese. Make sure you understand every term and condition mentioned in the document. If you do not understand, check with your friends who can explain it to you.