What is Housing Finance? Basic Concept

Housing Finance

Housing finance is an important part of individual’s life as they move ahead in life. Buying a house is the largest expenditure in lifetime; however it is impossible to buy a house based on the savings and the income source.

You need some firm financial support so that your lifestyle doesn’t get hampered. Housing finance is the anything related to buying of a property, plot, house. It is provided by the banks and the non-banking financial institutions. The loan is offered at a lower interest rate of 8.65 -9.20 % and a nominal processing fee of 1-2% of the loan amount. Funding is also through traditional finances but they do not provide flexibility in the interest rates and the repayment options. Borrowing from friends and extended family is also against self respect.

Here housing finances provide financial help and turn your dream of owning a house into reality

Bank Loan Housing Finance

You can apply individually or jointly for the loan the proposed owners will be the co applicants of the loan. But co applicants are not the co-owners of the loan. You just need to visit the website of the bank or housing finance company fill in the required details and the scanned copies of the needed documents and apply for the loan. While providing housing finance the banks and the financial institutions check the age of the customer, age of the property while availing the loan and at the time of maturity, the bank statements of the customers, the salary statements etc. This will help the lender to know the customers current financial situation.

It is extremely important to maintain a good credit score, banks or non-banking finance firms do the background check of a person before availing him a loan. You can check your credit score by visiting a government recognized site like http://www.cibil.com and get your credit report. Low CIBIL score will reduce the chances of getting a loan from the financial institutions. After the bank has verified and is satisfied with the background check it will offer you loan which will vary from 40-70 % of the property. While choosing for housing finance you should check which housing finance company provides best home loans at a lower interest rate and flexible repayment tenure.

With the advancements in technology the banks have also changed their way of functioning, nowadays you don’t need to visit a bank or the branch to enquire your loan and waste your time. You can just visit the website and apply for a loan and wait for a call from the company.

It is necessary for a person to know about his home loan. As housing finance involves long key commitment so he should be aware of the loan amount, the interest rates , the repayment option he or she has opted for and the maturity of the loan. He should also be aware that while availing for housing finance the EMI of the loan shouldn’t not be more than his salary this will create problems. He should also try resorting to simple and sedentary lifestyle to avoid financial crunch

Author: Tom Craig C

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