What you must know before opting for a Home Loan ?

Choosing  a Home Loan requires lot of research and hard work, after all you are planning to enter  into a fairly long relationship of repayment.   There was a time when you had very few players in the market and your decision remained at their whims and fancies , but now  the Indian Mortgage market has taken a big leap in the  last few years  and the customer has become  the king and  now he decides who to go with.  You have more than 50 players  operating in the market and  the space is divided among Banks and Non Banking Financial Corporations (NBFC) or Housing Finance Companies (HFC). The customer can decide the lender  according to his individual need. 

Every customer has  different  kind of  need  while choosing a Home Loan, but it  would depend on the Income, Property Type and Age   and Credit Score ,to determine the quantum of Loan and  terms which can be offered to him,  

While the Borrower wants a Loan which fulfills all his needs but the Credit Manager  looks at it from the point of view of Loan Repayment,  Every penny given as a Loan must come back to the Lender with interest and no additional collection cost. Housing Loan business has very less margins and constant market fluctuations make it much tougher for the Lender. The Bank/NBFC has to work on very tight margins so it becomes extremely important for them to assess the credit worthiness of the applicants at the application stage, no institution wants to get into a relationship which it may have to repent at a later stage. With the advancement of technology the credit process has also become very smooth, the banking sector had undergone a big change in the leadership of RBI. Unlike few years ago bank had no knowledge of customer previous relationships , now with proper mechanism ,

no bank wants to touch a defaulter. Banks has there internal checks and they also rely heavily on CIBIL a centralized data  process which records all the liabilities transaction at one point be it Credit Cards, Car Loans , Home Loans or any other kind of Credit relationship an individual or a company has with the Financial Institution.

Your CIBIL score decides your credit worthiness in the present day market. The higher score higher are chances of your getting that all important Loan. The normal credit score requires for availing a Housing Loan from a A+ institution is 700 on wards. So you must know what it takes to achieve this kind of score.  

But there may be situation that you have a zero CIBIL score or Negative score , you can still get a loan , since this score is only possible when you have never taken a loan in your life. The Financial Institution then takes a call based on your profile , which is on your business and employment stability. The bank can still give you a loan based on that. So make sure before finalising the property you must check with the bank , the credit worthiness of individual differs from person to person. Go in for a Pre- Approved Loan which is check on your credit feasibility and then finalise your dream home.