A home loan has definitely made the process of home buying much easier and there is no reason to wait till retirement and gather funds from the employer to be able to afford a house. Many are buying their first homes before they are hitting mid- thirties and in a thriving city like Bhubaneshwar, where there are many lenders operating, getting a suitable home loan product is not difficult. However, one should know about some important clauses that are a part and parcel of a loan and home loans in Bhubaneshwar will make your home funding process a lot easier than you had ever anticipated.
To start with, one of the most important clauses in a home loan is whether the lender will retain security cover for the loan? It is crucial that the loan should have adequate coverage for the entire tenure. Usually the property itself becomes the security for the loan but in case this offers insufficient security, like the fluctuations in market prices, then the lender might ask for additional security. The crux of the matter is that although home loans are unsecured loans in general, the property itself will be taken over by the bank if the payments are missed. It is important for the applicant to find out properly that how long after missed payments does this factor kick in and how much time do you have to pay your dues before the property is foreclosed.
To start with, one of the most important clauses in a home loan is whether the lender will retain security cover for the loan? It is crucial that the loan should have adequate coverage for the entire tenure. Usually the property itself becomes the security for the loan but in case this offers insufficient security, like the fluctuations in market prices, then the lender might ask for additional security. The crux of the matter is that although home loans are unsecured loans in general, the property itself will be taken over by the bank if the payments are missed. It is important for the applicant to find out properly that how long after missed payments does this factor kick in and how much time do you have to pay your dues before the property is foreclosed.
In case there are other balances to be settled, any payment that the customer would make would first be utilized to pay off the earlier dues and then the payment of the EMIs would start. This could be anything related to penal home loan interest rate, late payment of earlier EMIs or even the processing fees of the loan. Only once these dues are cleared, the payment would be applied for EMIs. At this stage, it is a good idea to use a home loan calculator to ascertain how much money has to be set aside each month for loan repayment.
Another important clause to consider here is the assignment to third parties. The lender might opt to assign the home loan to a third party in case of default or for some other reason. The obligations and terms of the loan will remain the same and then transferred to the identified third party. The original lender need not ask the home loan borrower before doing this so if this is something that you are not comfortable with, you should enquire about such policies of the lender at the very beginning.
Some lenders will not allow prepayment and even if they do, they will often charge hefty fees to discourage the customers. This is because by making prepayments, the customer gets to pay off the loan much quicker and the lender loses out on the profit he would have otherwise made from the interest paid. The prepayment made by the customer is also adjusted against the outstanding principal at the time of payment. Try to find out about the various financial implications before of making prepayments when you research your lender.
Last but not the least, you should enquire about all the eligibility criteria before you zero in on the lender so that you have no problem meeting their parameters and suffer a loan rejection. Try to opt for a home loan eligibility calculator to determine the various aspects of the home loan provider and prepare yourself accordingly so that the loan approval process is a hassle free one.
