Getting your dream home is a person’s lifetime achievement. But you may not always have all the finance needed. This is where your bank lends, which helps you own your dream home.
But life is not always a fairy-tale, there are ups and downs. Here are few things you would like to keep in mind before you opt for a home loan.
Home loan is a type of a secured loan, the repayment of which is done in monthly EMI’s or instalments. But what happens when you fail to pay your EMI’s?
The bank or lender does not resort quickly to seizing your asset. As it is an expensive affair for the bank to resell your mortgaged property to recover the loan amount.
So then what does the bank do?
Banks wait for a period of 90 days after which the loan is termed as a non-performing asset. However, default occurs when the failure to pay EMIs is repetitive. Banks reach out to the customers in all sorts of ways, reminding them to make the payment.
Once the 90-day period is over and the borrower shows no signs of responding of making the payment. The lender/bank seizes property or house, after which the bank announces the 60-day notice to the borrower until the property is put up for sale.
How to protect your Dream home?
Proper budget management: Having a home loan can be a burden, but you do not want to make your dream a burden? That is why it is good to spend wisely.
Higher EMI amount: Opting for a higher EMI amount will help you in the long run. As paying a higher EMI amount decreases your loan tenure. Paying off your loans as soon as possible will help you plan better for things; retirement.
Investments review: Review your investments and check whether there are any unnecessary expenditures, removal of these will help you service your home loan faster.
Loan calculators: Its tiring to do the math here? But we have a solution; use loan calculators to better determine the best home loan for you.
Counselling: Its always good to take a third person’s opinion, when taking big decisions. However, its wiser to take an expert’s opinion. Visiting debt counsellors will you give you a better insight, before applying for a home loan.
