A home loan seems like a solution sent from the heavens when trying to invest in real estate. The home loan application is so much easier than a generation ago, and it helps you achieve your desired lifestyle at a young age. Buying that apartment in Chennai is no longer a distant dream. But without the proper knowledge, people are bound to make mistakes and complicate their financial situation.
Not doing enough research:
Most people just go with their existing banker or lender simply because they are afraid to step out of their comfort zone. Each individual’s home loan needs are unique and careful research has to be done to see which lender can meet those financial needs. Seek the counsel of a legal advisor to determine if the lender is genuine and is in fact giving you the best deal. Compare between home loan tenures, interest rates, and flexibility to choose a loan that you can comfortably repay without hurting your monthly expenses. A badly structured home loan can damage your credit score and decrease your borrowing ability.
Choosing the bank before choosing the property:
People are interested in buying apartments in Chennai. But oftentimes they are still looking at different properties but have already decided on where to get the home loan. This could mean trouble as little to no research is done on the property itself. Lenders may reject the loan if they don’t find the property trustworthy. Choose the property first, and most times the developers have partnerships with reputed banks that offer convenient home loans. You can take advantage of the tie-up.
Miscalculation of their finances:
When people apply for home loans they tend to go for the highest eligible amount. Though the logic sounds fair, you need to remember you will be accumulating a lot of interest in it. In the long run, you would end up paying a lot more than you bargained for, which may put a dent in your other financial commitments. Check your current financial status and long-term plans. Take your children’s education, your insurances, and other mortgages and investments into account. Arrive at a suitable amount that you can comfortably pay off while keeping your lifestyle the same as before. Before you put the down payment on the luxury flats in Chennai, check if it is within your budget.
Insufficient funds for the down payment:
While the home loan gives you the confidence to go ahead and purchase your dream home, keep in mind that there is a hefty down payment to pay. The Indian Government and RBI have stated that at least 20% of the total cost has to be borne by the customer. The banks can sanction a loan that covers 80% of the cost if the value of the property is between 30 lakhs to 75 lakhs. If the property value is less than 30 lakhs, then the split is 10% and 90%. If the value is above 75 lakhs, then the split is 25% and 75%. So to buy an apartment in Chennai, you must be prepared for a minimum of 20%.
Not getting insured:
Home loans are a huge commitment, and some try to put off other commitments like insurance while paying off a home loan. But imagine if you were to encounter a medical emergency or property damage. Getting life, medical, and property insurance ensures that you are prepared for any unforeseen circumstances. Even in the case of death, the family will still be provided for and be able to meet the home loan payments on your apartment in Chennai. It is important to secure the future even while planning the present.
Lifestyle Housing is a reputed real estate developer that offers 4 BHK and 3 BHK flats for sale in Chennai. Our projects aim at providing a luxurious lifestyle at affordable rates. Check-in with our sales team to find the right project for you.