Home Loan is very Important segment in an individual's personal financial budget. In India, Real estate Investments are considered to be the safest one along with emotional decisions to many Indians.
Recently RBI has decreased interest rate, so people can get Home loan at cheaper rate around 7 % to 7.30% P.A through Various financial institutions.
Here, are 4 most Important guidelines while taking Home loan which are Important to keep financial health good.
1) Price of House: The Most Important thumb rule is deciding budget of your house which you plan to purchase.
The price of house Should not exceed 5 times of your annual salary that means if you have annual salary of 10 lakhs you should not go for property pricing more than 50 lakhs.
2) 35/50 rule: EMI amount should not be more than 35% of your Home Loan EMI.
And Total EMI amount should not be more than 50% of your combined all EMIs and credit cards expense.
So rest you can save for your family expenses and for long term goals.
3) Credit Score: The Highest credit score helps you to give a good deal from banks on Home loan interest.
Credit Score above 750 is considered to be good by banks for lending.
4) Take Shorter loan Duration:
EMI per lakh will be higher For shorter period, but just paying little high EMI, you can save lot on interest.
So Try to go for 12-15 years duration rather than going for 20-25 years duration.
Hope, You all follow these thumb rules when you buy property on home loan.
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