Home Loan: A Necessity for the Middle-Class People

Having a house of their own is a dream of every person. This is the first thing that comes to the mind of a person when they try to settle in a new city or trying to move from a rented house to their own. In the last few years, the housing construction industry has been on the rise, providing people with multiple projects where they can buy their own home at affordable prices. Although the housing projects are affordable, still their cost is way too high to be paid in whole. Also, with so many facilities that these builders provide, there are many other problems associated with it as well. Therefore, it is always suggested that one should go for a Home Loan to purchase a house as it not only lowers the burden by converting the house cost into EMI but also increase your credit score. Before going for a Home Loan, one needs to go through a lot of things so that no problem is faced while buying your dream home. Before selecting your house, make sure you have reviewed multiple housing options to select which one will suit you the most. The covered area, location, transport facilities, locality, market, and security are some of the basic things that one needs to consider before selecting their house. Once that is done, either select from a ready to move in flats or from a building that is still being constructed. Make sure to check and verify the builder and the amount of time it will take for him to get the building ready.

Once these things are done and you have made up your mind to purchase a certain house, make sure to check the cost and the available finance options for it. For a middle-class person, it is not easy to spend the whole amount at once, as it can take years to save that amount. To spend all that amount in one go will create problems, if you need the money in between due to any reason. Therefore, the best way to buy a home is to get a Home Loan. Currently, the market is filled with a variety of Home Loan plans that provides loan up to 30 years, with attractive schemes and interest rates. Taking a Home Loan not only decreases the pressure on one’s mind and shoulders but also help to manage the finances properly. Home Loan, allows a person to pay the entire amount for a house in easy monthly installments which is much more affordable and easy to pay. The best part is the duration for which it can be taken. The duration for a Home Loan can go up to 30-35 years, depending upon bank or company. In recent years, we have also noticed that the interest rates for Home Loan have been decreasing, as the government is promoting schemes such as housing for all. In the housing for all scheme, the government is building affordable homes for people who do have a high budget to spend. These schemes also provide Home Loan through private and government banks at a special rate of interest. Home Loan have made it easier for an individual to buy his own house without the need of spending a large amount. Let’s have a look at some of the features, process and why Home Loan is important while buying a house.

  • Process of the Home Loan: The process of the Home Loan is very secure and goes through some process. First, the person’s eligibility and annual income are checked to make sure one can pay the monthly amount as EMI. Secondly, the person has to provide all his financial and personal details for the bank records and verification of the identity. Once that is done, the financial institutions will check the details of the housing project for which you are taking the loan. Oce that is done and verified on all platforms, the bank will issue a check in the name of the builder or the company from whom you have purchased the house. Once that is done, you can get your home and start paying the amount monthly.
  • Loan Amount: Home Loan can ease out the stress of paying the whole amount by converting them into EMI. But how much amount can be availed as a loan? It will be different for every Company that provides Home Loan. It starts from an average of 75% and can go up to 85% of the actual amount of home. In this case, one has to provide the down payment of 10-15 % of the actual home cost and then the rest amount will be provided as a loan.
  • Loan Duration: Loan Duration has recently increased for all types of Loans. Earlier Home Loanused to provide a loan period of up to 25 years. However, the cost of purchasing a house was also less as compared to now. With the increasing housing cost, the loan tenure was increased up to 30-35 years depending on the company. This increased duration has further eased the payment of EMI for the consumers.
  • Interest rates: Due to many companies providing Home Loan at very attractive interest rates, it is always changing. Competition and changes in different types of rates by RBI causes a lot of fluctuation in the interest rates from time to time. However, in the last few years, increased housing construction has led to a lot of people applying for a Home Loan. Due to this companies are reducing the interest rate for a Home Loan to attract customers.

These are some of the factors that contribute towards deciding which type of Home Loan are better and which financial institutions should opt the Loan from. Better government policies for the middle class has also contributed to the ease of Home Loan procedure to buy a house. There is no doubt that Home Loan has brought a middle-class person closer to his dream of buying his own home, which seems a little difficult earlier.


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