Tips to Manage Your Home Loan Smoothly

Are you buying a property? It involves huge investment but nowadays many financial institutes can help you buy your dream home. Before applying for a loan you should do your home work. Once you take loan it is your responsibility to manage your home loan as this is a long term financial commitment. Before shouldering the huge financial commitment one should learn the financial discipline otherwise he can lose his roof. There are some tips you can use to mange smoothly your repayment of loan amount:

1.Choosing the right lender

There are lots of financial institutions in the market but you need to select the one which is suitable to your requirements. Amount of loan, interest rate, flexibility, after service, additional cost of home loan, penalties, feedback from other customers, etc. are the factors should be kept in mind. Your property should be approved by the lender. Ensure that it is a reputed institute that doesn’t have any loop holes (hidden costs) in their home loan scheme.

2. Down payment arrangement

Before going for buying a property you need to see the margin money that is required to pay at the time of booking. The lender or a bank lends only 70 to 80 % of the cost of property. Rest of the amount you need to arrange. The amount you have with you can also help you in choosing the right property. If you have down payment money in your hand you can manage future repayments smoothly from regular income.

3. Budgeting is good

Always make the budget that includes your monthly fixed expenses and the fixed income. This way you can easily maintain a balance between your incomes and expenditures. If there is a surplus amount, you can keep it for future.

4. Go for fixed interest rate

While applying for loan it is better if you choose fixed interest rate as it can help you in easy repayment because you know the fixed amount to pay every month. Interest rate hike in the market doesn’t affect your budget.

5. Borrow as much as you can repay

You must keep in mind that your borrowings should not take over you.     Your monthly EMI should not be more than 30 to 40 % of your regular income otherwise it can disturb your regular necessary expenses. Do all the calculations before taking the loan as it should not cost your peace of mind? A comfortable amount that can be paid without sacrificing the current necessities can be chosen to repay the loan as per the tenure.

6. Have a buffer

It is a good habit to save some money every month for any unexpected or emergency use like in case of job loss or interest rate hike or any sickness requirement, etc otherwise you can land up in a disastrous situation.

7. Avoid more loans

It is wise to avoid your expenses till you clear your past borrowings as it can disturb your budget. It is difficult to manage too much financial burden for long time in the present economic uncertainties and fluctuating costs.



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