These have been specifically made to not enable you to miss on the possibility to make such dreams become a reality and never have to pay all the amount of money in advance. However, going for a mortgage loan may appear an elaborate process. There are lots of factors associated with a mortgage that you’ll require to learn before going for a loan. One of the most prominent ones are the following:-

1. The factors which might affect the eligibility criteria: The ultimate way to calculate your mortgage loan eligibility is by calculating the EMI. Generally, banks limit the total amount to 40 and 50% of the borrower’s income – like the basic salary and the dearness allowance. In addition, it considers the credit card score of an borrower. If you have any existing loan or an unhealthy credit history, the loan amount will be decreased further or you might have to pay an elevated interest on the house loan. People who have a well balanced income, strong repayment capability and good credit history think it is relatively much easier to get financing when compared with people that have erratic earnings and woeful credit history. Also using a co-applicant gives you to obtain a mortgage loan easily.

2. Understand your loan type: Banks offer mortgage loans in two interest types – the fixed interest loan and the floating interest loan. The fixed interest loan is a kind of home loan where in fact the interest levels remain same and borrower must pay a set EMI throughout the loan tenure. On the other hand, in case there is a floating interest, it varies according to the marketplace conditions that lead to fluctuation in EMI amount more regularly. That is why mortgage loans with fixed interest type have one to two 2.5% higher interest than floating interest loans.

3. The interest: Whatever home loan type you select, don’t forget to negotiate on the speed. Although banks would will have an edge, you need to haggle upon this, particularly if you have been a loyal customer of the lender and have checking account in the same bank. The negotiation will be a lot easier if you have a specific credit score. Besides, you may even be benefitted if you make an application for the loan by the end of the month. Because the banks have business targets, they could be more flexible at the moment if indeed they want the business enterprise.

4. The small print: A mortgage agreement is a legal document that has everything of the loan. If you feel that not paying the EMI promptly is only going to lead to troubles, you’re wrong! There are lots of clauses hidden in the small print. Thus it is preferred to read the ultimate papers of the loan agreement carefully before signing the dotted line. Be cautious about the loan processing fee, penalty charges, hidden clauses, service charges and the prepayment penalty, etc.

5. Longer loan term means costlier loans: In most cases of thumb, the longer the tenure of the loan, more would be the interest it’s likely you’ll pay over a period. Many are able this rise however, not everyone can achieve this task. It is therefore wise to obtain a loan amount that you may easily payback in the shorter tenure. In this manner it’s likely you have to pay huge EMIs but also for a shorter duration and without propping up more interest.

These are a number of things that you need to retain in mind while trying to get a mortgage.