When you think of investing in flats in Chennai, the first thing you talk about is taking a home loan. But it takes a lot more planning and nuance to invest in properties. Here we highlight important financial tips for beginners to safely build their property portfolio.
Keep your credit cards in check:
Credit card debt is real, and it can prevent you from getting the best deal on your home loan. Make sure that all your credit card debt is paid off, and unused cards are canceled before you apply for a home loan. You can also try reducing your credit card limit, as it is also taken into account how much you are eligible to borrow further from the bank.
Consider Debt consolidation:
You might be paying off several smaller loans, including credit card outstanding, interest on Store cards from your favorite brands, etc. This casts a shadow on your home loan application, especially if it’s a big loan for a flat in Chennai, as you are projected as a person with multiple running loans. To mitigate this, consider debt consolidation by taking out a single, relatively large loan to pay off the rest. You may even get a better interest rate on this new personal loan.
Compare different banks and financing options:
Of course, buying a flat in Chennai calls for a massive home loan, and it is easier to process with your existing bank or lender. But the convenience is belied by the reduction in the eligible amount as they consider every other loan you have taken with them into account. Compare your eligibility with other banks and finances to ensure that you get the maximum amount by increasing your borrowing limit.
Never Cross-collateralise your properties:
When you place more than one asset as collateral, you will be in a bind when it comes to taking out other loans. It’s a simple matter of never placing all your eggs in one basket. You can end up getting all your properties sold off or repossessed by the lender to pay off your debts.
Analyse and update your security:
Once annually, have your assets placed as the collateral reviewed by the bank. The property values increase annually, and this should reflect on the portfolio. Over the period of time, you would have paid back the loan to a considerable extent that you can remove the security from your flat in Chennai or any other property investment.
Check for the line of credit options:
This pandemic was an eye-opener for many as to the importance of having a reserve fund. Even if you find yourself without a job, or with additional financial commitments, your cash flow must remain the same to meet your monthly loan payments. You can also look at a line of credit or a redraw facility with your lender which allows you to stretch your money and borrowing ability if the need arises.
Opt for a structured loan:
When applying for a home loan to buy flats in Chennai, you need to go to a reputed bank or lender. They offer structured loan tenures and interest rates that are flexible. The loans can also be structured as interest-only as it opens up your borrowing capacity. This makes your tax filing and overall loan repayment easy and takes advantage of the tax benefits too.
Have a financial advisor on hand:
If you can afford a financial advisor, then always take them on board before making a decision on your property investments. They can guide you to the right loan structures and advise you on how to consolidate or close your previous loans. This advice is essential to maintaining your credit scores.
Always have your plans insight:
All successful investments have a well-planned strategy behind them. Set down your long-term property goals and work towards achieving them. Do a detailed cash flow analysis to ensure that you can afford your dreams and attain them smoothly. Like the before section said, you can take the help of an experienced financial advisor for this.
Lifestyle Housing is a reputed developer of luxury apartments in prestigious residential locations. We have 4 BHK apartments in Chennai that are luxuriously appointed. Our 3 BHK flats for sale in Chennai are popular with first-time homebuyers. Our Sales and Finance team can expertly guide you to the right lenders and financing options for you.