A Complete Guide to Home Loan Online Apply

Owning a house is still a dream of many people in our country. The increasing prices make it more difficult for people to purchase a home from savings. It is better to get a home loan rather than rely and depend entirely on savings. A loan is the borrowed amount of money from banks, NBFCs, or other financial institutions. A house loan is a secured loan that is borrowed from a financial entity in return a borrower shall pay the loan amount with interest.

A home loan requires one to have a handsome amount of cash for a down payment or be qualified for private mortgage insurance (PMI) which ensures that the lender gets his money back in case of default on the mortgage. On the other hand, when applying for a home renovation loan, a borrower may not need to provide any upfront money or private mortgage insurance depending on their credit score, income, and other qualifying factors. Depending on the loan amount, interest rates can be fixed or variable. A fixed-interest rate home loan will stay the same regardless of interest rates.

Apply home loan online through the My Mudra website and get it approved and disbursed in no time. Get your documentation done online and enjoy the quick process of loans.

Home Loan Interest Rate

Fixed interest rate for a home loan

A fixed-rate loan has a set interest rate that will not change during the loan's term. The advantage is that a borrower can plan their monthly budget around a fixed payment. The major disadvantage of this type of interest rate is that, if interest rates drop by the bank the borrower will not have the option of refinancing to the lowest home loan interest rate.

Floating interest rate for a home loan

The adjustable interest rate is one such where the home loan interest rate varies, it might rise or fall over time as per the market conditions. A variable-rate loan can be a good choice for a homeowner who expects his or her income to rise in the future and wants to lock in a lower monthly payment. However, if you expect interest rates to drop, an adjustable-rate loan could end up costing you more over the long term.

Types of Home Loan

There are various types of Home Loan that can be used for different purposes.

1. Mortgage Loan

A mortgage loan is a type of debt secured by real property. While most people think of a mortgage loan when they imagine financing a home purchase, other types of mortgage-backed loans are also available like home equity lines of credit. A mortgage loan may have fixed or adjustable interest rates. The interest rate on a mortgage depends on certain factors like credit score, debt-to-income ratio, and many more. The borrower is expected to pay a higher interest rate on a mortgage if they have less than stellar credit.

2. Home Equity Line of Credit

A home equity line of credit is a type of mortgage loan that allows the borrower to draw money as per their need this is the biggest advantage of a home equity line of credit. The disadvantage of this credit is that the borrower must pay back the money with interest. With a home equity line of credit, one can finance home improvements or other projects, including education and medical expenses. The tip for people who are thinking of opting home equity line of credit is to shop around for the best interest rate for a home loan online.

3. Renovation Loans

A renovation loan allows the borrower to finance the cost of remodeling a home and building a new home. While it is possible to get a home equity loan to finance a renovation project, a renovation loan is easier to obtain because it is a standard type of loan that does not require proof of equity in your home.

Should You Take Out a Loan to Renovate?

When deciding whether to take out a home renovation loan or an equity loan, consider how much money you need to complete your renovation project. A home equity loan may be a better choice if you need a significant amount of money. A renovation loan may be best if your renovation project is relatively small. If you take out a home equity loan, make sure you will be able to pay it back with interest. This may be difficult if you do not have a stable income or a secure job. If you have bad credit and cannot obtain a loan from a traditional lender, a home equity loan may be your only option.

RERA ACT For Home Loan

The Real Estate Regulatory Authority Act was passed on 10 March 2016, and it has offered the solution usually faced by property buyers. This act ensures transparency between buyers and sellers of real estate. Under this act, the buyer can complain against the real estate developers for delaying the ownership of property purchase or cheating and can even question the status of the project at each step. Real estate developers must register their property or housing project before promoting it, this ensures authenticity. It is important to read and understand all your rights before buying a home.

Factors that Impact Home Loan EMI

1. MCLR Rates: Marginal Cost of Funds-based Lending Rate, is the minimum lending interest rate offered by the bank. The interest rate can increase or decrease based on the changes in MCLR. It depends on many factors like

• • Operating cost,
  • Marginal cost of funds,
  • The Cash Reserve Ratio (CRR) and any negative carry on it,
  • Tenor premium

2. Type of Interest Rate

• • Fixed: Your interest rate will remain the same throughout the time period.
  • Floating: Interest rates may increase or decrease depending on the changes by the Reserve Bank of India.
  • Mixed: Interest rate remains fixed for a certain period of time and then becomes floating after a specific time period.

3. Loan-to-Value Ratio: It refers to the percentage of the property on which the loan can be sanctioned.

4. Credit Score:Credit Score or CIBIL is the statement of your repayment history and financial habits. Usually, a credit score above 700 is considered to be good for taking a loan.

5. Location of the Property: Location impacts interest rate, good location, the new property would have more resale value than property in a less desirable neighborhood.

6. Job Profile:A stable income would have a low risk of repaying as compared to an unstable income. Thus lower interest rates are given to the former who have stable incomes.

7. Tenure:Loans with a shorter tenure attract a lower rate of interest (even if the EMIs are higher) than loans with a longer tenure (which will have lower EMIs but a higher interest rate).

Major Home Loan Providers in India

Mentioned below are the banks and the NBFCs that are providing the lowest home loan interest rates.

Apply for a Home Loan in India

• Visit the website of My Mudra and search for Home Loan in the secure loan section.

• Click on the Apply Now button and fill in the form.

• Get the documentation done and submit the form.

• You will get the soft approval of the house loan on your screen.

• Get your loan disbursed from top banks and NBFCs in no time through My Mudra.

Conclusion

A Home Loan is the financial aid that is provided to buy your home or when you want to renovate your house. Taking a home loan can be easy with My Mudra. The organization is providing house loans at 8.5% P.A. My Mudra is among the top fintech companies in India which is helping people in getting loans. Get your home loan approved and disbursed in no time.

Also read: Documents Required for Home Loan for Salaried Person