Availing a home loan is probably one of the most convenient ways to buy property. However, there are several misconceptions prevalent among individuals when it comes to these credit options. They can be detrimental and cause unnecessary hassles to those people who are actually interested in buying a house.
So, if you are planning to buy a flat in Bangalore, knowing the actual truth about some common home loan myths is essential. Read on to know more!
5 of the Most Common Home Loan Myths
Here are some of the most common home loan myths busted, which you must be aware of :
Credit Score Is the Main Factor in Home Loan Approval
One of the biggest misconceptions among home buyers is that their credit score is the main criterion when it comes to getting loan approval. However, the fact is that an individual’s credit score is just a mark of his/her creditworthiness.
While a good credit score is necessary, banks determine an applicant’s eligibility based on several factors like age, employment status, financial capabilities and more.
Shorter Tenures Are Always Better
Most people recommend taking home loans with shorter tenures to avoid paying less interest. But this significantly increases the equated monthly instalment (EMI) amount, which can be difficult to pay after a certain point in time. Additionally, missing EMI payments even by a day can incur heavy penalties.
Instead, individuals should opt for a loan tenure in which they can pay the EMI timely, without straining their monthly budget.
Penalties Are Always Applicable for Prepayment
It is a common misconception that lenders always charge penalties for part prepayment of home loans. However, the truth is that this criterion tends to differ among loan providers.
Usually, most banks allow up to 25% prepayment of the outstanding loan amount. In case of larger prepayments, a 2-4% penalty may be applicable.
Banks Will Cover the Entire Property Cost
Another widespread myth about home loans is that banks cover the entire property cost. In reality, as per the Reserve Bank of India (RBI), lenders can only cover a maximum of 75% to 90% of the property value.
Moreover, these criteria tend to differ among lenders, and the applicant’s eligibility also plays a major role in this regard.
One Cannot Apply for a Home Loan After 40
Now, many believe in the myth that people cannot get a home loan after 40. However, this is not the case. For salaried individuals, banks consider the maximum retirement age as 60.
Thus, applicants aged 40 and above will be eligible to opt for a loan with a smaller tenure. Furthermore, banks will assess the individual’s credit score, employment history, etc., to take the final call.
Now, a home loan is a big financial commitment. If you wish to stay in Bangalore, you should consider utilising the money to buy a 2 BHK in Electronic City, which will be worthy of the investment.
Mahendra Aarya is offering luxurious 2 BHK flats in Electronic City, featuring spacious living areas, bay windows, attached balconies, double-height lobbies and more. Our apartments in Bangalore are built on a 9.42-acre area with 82% open space. Additionally, we have 50+ world-class amenities, which are available on the premises.
So, if you are on the lookout for a 2 BHK flat near me, call us today! Your quest to find the best place to buy a flat in Bangalore ends here.
