Summary: A home loan is a long-term financial commitment. If you don’t want it to go wrong, you should avoid the following mistakes.

Today, you can easily apply for housing loan online and even get approval within a short time. Lucky are those who qualify for a low-interest rate. Buying a home is a big decision because it has far reaching effects on your financial life. For example, opting for a bigger loan that you can’t repay could create unnecessary stress.

If you don’t make any mistake, you can make most of your home loan.

1. Applying for a home loan without checking your credit score

Lenders would first check your credit score. If you know what your credit score is, you can take measures to improve it. In this way, you can prevent hard inquiries and prevent your credit score from falling. Do you know that you need at least a 700 credit score to be eligible for a home loan?

2. Borrowing more than you need or can repay

If you have a good credit score of 700 or above, lenders will offer the highest amount. sIf you borrow more than needed, you can get stuck in a debt trap. Calculate interest rate, monthly instalment, hidden charges, and total cost of a loan before you apply for housing loan online.

3. Not comparing interest rates 

The interest rate varies from one lender to another. In this situation, if you accept the first offer, you could miss an opportunity to find a lower interest rate. It is better to shop around and compare interest rates before opting for a loan. Interest saved is money saved in the long run.

4. Underestimating additional costs

When you apply for housing loan online, you pay some additional charges. For example, you pay a processing fee, stamp duty, legal fees, and insurance. These are additional costs, but mandatory. These additional expenses could increase the overall cost of the loan.

5. Not reading terms and conditions

Every loan product has some terms and conditions mentioned in fine print. They tell about prepayment charges, penalties, and interest rate revisions, if any. It is advisable to read everything written in fine print before approving a home loan.  

6. Not planning EMIs

Plan your EMIs and make small payments in-between EMIs to speed up your loan repayments. Proper planning will help reduce your debt burden in the long run. You can apply for housing loan online, but you should ensure proper planning to prevent the debt from eating into your savings.