A home loan is a financial service that is given on behalf of banks and housing finance companies (HFC). It is one of all the essential loans that almost every job-profession people need. While taking a home loan, you should decide whether the loan you are taking is correct or your decision is wrong. You don't have any confusion while taking it. While taking a home loan, people usually make many mistakes, pass through many myths, learn about the four myths that you should avoid.
Best to be selected for the short term:
Let's say that a home loan is a long-lasting loan. Sometimes the borrower repays the loan amount for 20 years. Most first-time borrowers believe that it is better to borrow for a short term. But those who choose loans of low tenure usually pay higher equated monthly installments (EMIs). High EMIs can affect your monthly budget, so you don't have much money left in financial emergencies. It is best to choose mid-term loans with mid-range interest rates and affordable EMIs.
Low-interest loans are the best:
However, everyone wants him to get a home loan at the lowest interest rate, but it is not practical at times. The interest rate determines the lender based on a number of factors such as your loan score, income, debt repayment behavior, etc. Secondly, the low-interest rate may seem attractive, but you have to make more advance payments.
Fixed interest rates are better than floating interest rates:
Many borrowers choose fixed interest rates compared to floating interest rates. He believes that since the market move is unpredictable, it is better to stay at fixed interest rates. However, floating rates are usually better. First, the floating rate is generally lower than the fixed interest rate of 1.5% to 2%, resulting in a huge saving in the tenure of the entire loan. You can save more by electing more than one floating interest rate.
Low credit score, lenders reject loan applications:
All home loan paying banks ask you to tell you their credit score. Many applicants believe that if the credit score is less than 750 (out of 900) points, their loan applications will automatically be reworked and therefore avoid the application of debt. However, the fact is that even when banks are strict about credit scores, you still have the chance to get a home loan approved by contacting HFC for a home loan. HFC gives discounts to borrowers with low credit scores, but they take a higher interest rate for it.
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