Availing a housing loan is a major financial decision and subsequently an obligation for a first-time borrower. Therefore, before venturing he/she should look into the details of a housing loan.
Loan Amount Granted
Reputed financial institutions offer up to 90% of the mortgaged property as a loan. The rest is to be paid by the borrower as a down payment. Hence, an individual should first assess his financial standing and then avail a loan that he can comfortably repay.
Rate of Interest
The interest rate on home loans is comparatively lower than other unsecured loans. However, there are other charges such as processing fees, which a borrower needs to incur when you apply for a housing loan.
PMAY
Interest subsidies under CLSS for first-time borrowers are:
Economically weaker sections
Individuals who meet the following eligibility criteria are entitled to 6.5% interest subsidy –
Family annual income – Rs. 3-6 Lakh
Maximum loan amount – Rs. 6 lakh
Middle-income group
Interest subsidy of 4% will be availed to individuals who fulfill the following criteria –
Family annual income – Rs. 6-12 Lakh
Maximum loan amount – Rs. 9 Lakh
Middle-income group 2
Individuals will be entitled to 3% interest subsidy upon meeting the following criteria
Family annual income – Rs. 12-18 Lakh
Maximum loan amount – Rs. 12 Lakh
Repayment Tenure
Housing loan has a maximum repayment tenor of 20 years. Long tenor leads to inexpensive EMIs and increased costs of a loan. Short tenor leads to expensive EMIs and low costs of the loan.
A first-time borrower should consider the above-mentioned points to make an informed decision regarding their first housing credit.
Additional Read: A Complete Guide for First Time Home Loan Borrowers
