Planning to buy a new home requires meticulous planning. You must get your finances in order well in advance and be aware of the changing real estate laws. If you are planning to buy a home in 2020, you should start planning now. Committing to buy a home half-prepared can cause unnecessary stress. Below listed are five things that you can do now to get a home loan in 2020.

1. Know about the eligibility requirements of the lender

Eligibility criteria differs from lender to lender. To avoid getting your application rejected, read the eligibility requirement carefully stated by the lender you are planning to approach. Income and repayment capacity of the borrower are the primary factors in the approval process other than factors like age, income, credit history and credit score. Based on the specific requirements of the lenders prepare yourself and get all the necessary documents in place before to avoid any delays in the approval process.

2. Be informed of home loan interest rate

In India home loan interest are of two types – fixed-interest rate and floating interest rate. In fixed-rate loan, the interest rate determined by the lender at the time of approval remains the same throughout the loan tenure. It remains unaffected by the external market conditions. However, you must know that there can be a clause in the home loan agree, which empowers the lender to change the fixed rate of interest after every two years. Fluctuating interest loans as the name suggests, changes as per the market fluctuations. The EMI varies with a change in base interest rate. Compare both the options offered by your lender before choosing the loan type.

3. Improve your credit score

The CIBIL score or the credit score is an important factor that the lenders consider while assessing the loan application. Most lenders in India consider a CIBIL score of 800+ as an ideal score for approving the  hard money loan. So, if you have a bad credit history or not credit history at all, you can take steps to improve your CIBIL score now before approaching a lender. The credit score improves over a period, you can start by paying of your past dues and clear your credit bills. Slowly, as your debts decrease, your credit score will improve.

4. Make arrangement for the down payment

One of the pre-requisites of lenders in India is that you must pay up to 20% of the property’s value upfront from your own pocket as down payment. The lenders provide loan only up to 80% of the market value of the property you wish to purchase. So, if you wish to buy home in 2020, you can start making arrangement for the funds now to pay for the down payment. It is better if you can pay more than the minimum requirement as it would reduce the amount you borrow and subsequently reduce the burden of repayment.

5. Get familiar with the latest laws

The real estate and trust loan-related laws keeps changing often. If you wish to buy a home in 2020, you can get acquainted with the latest and the upcoming changes in the laws and prepare yourself accordingly. If you foresee any revision in the interest rate, you can make necessary financial adjustments to make the repayment affordable for you.

Edward Bertrand