HDFC home loans are not only valuable because they enable you to purchase your dream home, but also because they can be used for renovations and improvements on the property. Before you begin the application process, there are several details that you must know in order to ensure you are making an informed decision when it comes to choosing your lender, applying for your loan, and closing on your home. Here are 5 things you must know before you apply for a home loan.
1) What is the minimum income required?
The minimum income required varies from bank to bank, but it’s usually close to Rs. 15,000 per month and your total debt should be no more than 36% of your gross monthly income. Additionally, you must also have active savings or a current account at a nationalized bank in India. It’s also important that you have some money in liquid form and can prove that you can service your home loan without too much difficulty if required.
2) What types of documents do I need to provide?
The most commonly used documents to prove identity and residence are a Ration Card, Voter’s ID card, PAN card, Driving License, or Passport. Your employer should be able to give you an affidavit that states your date of birth and employment. If you are applying jointly with your spouse, then he/she will also need similar documentation. Remember that according to RBI regulations, each applicant must submit their own set of identification documents.
3) How Do I Know If I Qualify For A Loan?
If you’re planning to borrow money to buy your home, you’ll want to first determine whether or not you can actually qualify for one. For most people, qualifying is determined by how much money they earn and how much debt they already have. The general qualifications include:
(1) having enough income to support your loan payments;
(2) having a job history that proves you can handle regular loan payments; and
(3) being able to save enough for your down payment and closing costs.
4) Is there any prepayment penalty?
If you’re thinking about paying off your loan in full, you should check to see if there’s any prepayment penalty. This is an additional charge on top of your regular interest payments and can be quite expensive (on average, around 2% of what you owe). Even if there isn’t one listed on your contract, it doesn’t mean there isn’t one–it just means that it’s not readily available in writing. If you’re set on making extra payments, call your lender and ask. Otherwise, think twice before dumping money into something that could be put toward retirement instead.
5) Will I get tax benefits on home loan interest?
The short answer is yes. Even though you don’t get a tax break when you take out a mortgage, that doesn’t mean your home loan interest isn’t tax-deductible. If you itemize your deductions, which most Americans who use their home as an investment do, then you can deduct all of your mortgage interest on Schedule A.
The HDFC home loan is one of those loans that have fast become popular in India. Not only is it easy to avail of, but also you can use it to secure a place of your own. There are many banks and other lenders out there who offer home loans. It’s important to do your research before choosing one and applying for a loan from them.