Home Loan Checklist to Secure a Home

Post : December 21, 2022

Compared to many other housing opinions, owning your own home stabilises your life as well as puts your mind at ease at the same time. Especially if it becomes one of your personal assets. Over the years, the value of your house can increase depending on the market climate. So if you are unable to buy a house by completing the full payment upfront, home loan services are the next ideal choice. 

Home loans basically help to finance the purchase of your dream house. Home loans can be applied for both of them, either under construction or fully done. The most convenient part of the home loan is the repayment aspect is much more feasible for everyone. Generally, the repayment tenure is quite long. However, obtaining home loans from Islamic providers will help you keep your faith in check. 

Before you apply for a home loan, have a look at the checklist below in order to be prepared.

The Eligibility

Borrowers must complete a standard list of criteria to determine their eligibility. This includes your age, occupation, monthly income, debts, and credit score. The credit bureau score is an important variable that decides the amount of loan you are eligible to acquire. Usually, the ideal borrower should have a credit score of 700 or above to get a loan approved.

LTV Ratio 

Although you are able to get home loans from the bank, they do not give you 100%. The Loan to Value ratio decides the home loan that can be availed based on the cost of the property you chose. For instance, if the ratio is 70%, the bank provides you with a home loan for 70% of the property's cost, and the remaining 30% you have to cover by yourself. Therefore, determining the LTV ratio is vital for your loan.

The Home Loan Charges

 It is always better to pick a cost-effective loan structure with a low charge. That means a low processing fee and other extra charges when you receive the loan. This can also vary depending on the bank you work with.

Pre-calculate EMI

Banks usually give home loan EMI calculators that help the borrowers check EMI payable after entering the loan amount, repayment tenure, and interest rate. By looking at the EMI, you can easily determine whether your home loan would be affordable. In a case where the EMI is quite high, the best option is to reduce the loan amount or increase the repayment tenure. However, if you are able to afford any more EMI than the calculated amount, you can easily increase the loan amount and cut down the tenure.

Required Documents

In order to verify your identity and eligibility, you have to submit a set of documents along with the home loan application. Especially make sure to add the documents of the property to this set of documents. Prepare these documents beforehand so you won't be in any inconvenient situations.

Choosing the Right Institution to Apply 

When looking for a home loan institution, you may want to consider the institution's reputation. You should also consider how long the institution has been in business. The institution should also have a good track record of customer service. Furthermore, it is important to consider the institution's fees, rates, and the other discussed points above. 

It is always better to go to every bank and home loan institute in your area and compare everything together to determine which place offers the best service that fits your needs and budget. 

And also, it is crucial not to choose any lenders who have a bad reputation in the finance market. Good research will ensure that your home loan is seamlessly acquired successfully. Therefore, take a good 2 weeks and start doing your research online and offline to find the best place to help you build or buy your dream house. If you're a Muslim and are worried about finding the best home loan, Afiyah Financial Services can be of help. 


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