Getting Loans

1) How much can you borrow Check out how much you can borrow. Most housing companies, banks will give you a free estimate of this based on your current income and other financial data. Once you know this, you can skip looking at properties that are above your price range.

2) Shop for the cheapest interest rates and costs Check with at least three different lenders. It's not just the finance charges. Lenders have processing charges, early payment penalties and other hidden charges. Compare the deals from lenders in their entirety. And stick to a reputed lender.

3) Be prepared with your financial information and documents All lenders will require this information. It's smart to be organized.

4) Pick a loan that suits your payment horizon Loans are available for a five to fifteen year period. Pick a loan period in which you can comfortably pay off your installments.

5) Think about taxes The taxman looks at your home purchase favorably and is even ready to give you a substantial tax break on the interest you pay on your housing loan.

What will a lender require? To start with, lenders will require you to fill up an application form. Lenders look at your income, the immovable assets that you own and your expenses and debts. At the least you will need your tax returns and salary certificate. In addition, you will have to pay a processing fee to process your application irrespective of whether the lender will give you a loan or not.

Lenders will also ask you the amount and percentage of loan you would like to take. They may also need to know the amount you owe to other creditors.

If a lender turns you down, don't assume that you just don't have the financial standing to get a loan. Lenders may ask for the same information, but they have different ways of evaluating the information.

Closing the loan Once your loan is sanctioned, the lender will give you the formal loan documents to sign. Most lenders will require you to accept the loan within a certain period of time. The letter will also state the interest rate or tell you that the rate will be as of the day the loan is given to you. Bring with you the down payment check and post dated checks for installment payments. Always review the final loan documents and ask questions if you have any doubts. Refuse to sign unless your doubts are clarified or your documents will bind you for the term of the loan.