of time through the year when special promotional offers and discounts are in place. As a thoughtful consumer, consult various banks/financial institutions, research through media like newspapers- television and the internet before zeroing in on a provider with the interest rate that’s just right for you. Beware of such banking terminology as ‘fixed rate’, ‘floating rate’ and ‘reducing balance’.
Discuss these factors thoroughly before deciding on an option that suits you best. Also, banks charge separate charges such as processing fee, commitment fee and admin fee. These must be ascertained by you and used as a factor when deciding upon a bank/financial company for the loan.
What are the documents I will have to furnish?
You will be asked for documents such as:
* Photo Identity Proof,
* Passport Size Photographs,
* Copy of your PAN Card,
* Address Proof,
* Proof of your Age,
* Last 6 months bank statements,
* Copy of the Property Title Deed,
* Form 16 for the last 3 years (for salaried persons),
* Last 6 months salary slips (for salaried persons),
* Copy of IT Returns of last 3 years (for businesspeople/self employed people),
* Copy of audited Balance Sheet & P&L statements of last 3 years (for businesspeople / self employed people)
What is a ‘pre-payment’ option?
Pre-payment is an option afforded by your loan provider wherein, after a specific number of EMI payments, you can clear the entire pending amount thereby enforcing an early closure of the loan. Through this method you can save a lot of money towards the interest payments. Always keep this option as an important prerequisite when choosing a bank for your home loan.
What are the tax benefits that I can avail of for repaying a home loan?
This is actually one of the best things about taking a home loan – the tax benefits. You will be eligible to claim both the interest and principal components of your repayment during the year.
Roundup: Important points to remember
* Try keeping the repayment period as low as possible. More EMIs equals to more interest paid.
* Judge the quality of service and reputation of the home loan provider. Bad service quality could also mean that the loan