Home loan is a fund, a buyer has to borrow generally from a financial institution or bank to buy a property. The lender accepts to hold the title of your property until pay the loan amount and interest. It is always better for you to know about some hemo loan terminology before applying for a home loan to fix a best deal.
Here are some home loan terms:
1.Margin: When you take a loan, the entire amount will not be put up by the home loan company. 80 percent to 90 percent of the cost of the home is to be put up by it. You should put the balance 20% or 10%. The amount is called as margin or down payment.
2.Credit Appraisal: Before sanctioning the loan, a home loan company will look at a number of parameters like your income, savings, qualifications, age, work experience, nature of work.
They also see how many loans you have currently. Before giving a loan they take these issues into account. These process is called as credit appraisal.
3.Pre-approved property: All legal documentation and approvals are examined by home finance company. The builder get a approval stamp, if everything is in order. Builder's ability and complete construction will be viewed by home loan player.
4.Equated month installments: In order to repay your loan you have to pay money for every month is known as EMI. It is no equal combination of loan amount and interest rate. It will be stable during the whole repayment period.
The home loan financier will look at below things to arrive the EMI,
Here are some home loan terms:
1.Margin: When you take a loan, the entire amount will not be put up by the home loan company. 80 percent to 90 percent of the cost of the home is to be put up by it. You should put the balance 20% or 10%. The amount is called as margin or down payment.
2.Credit Appraisal: Before sanctioning the loan, a home loan company will look at a number of parameters like your income, savings, qualifications, age, work experience, nature of work.
They also see how many loans you have currently. Before giving a loan they take these issues into account. These process is called as credit appraisal.
3.Pre-approved property: All legal documentation and approvals are examined by home finance company. The builder get a approval stamp, if everything is in order. Builder's ability and complete construction will be viewed by home loan player.
4.Equated month installments: In order to repay your loan you have to pay money for every month is known as EMI. It is no equal combination of loan amount and interest rate. It will be stable during the whole repayment period.
The home loan financier will look at below things to arrive the EMI,
- The principal
- The repayment period
- The rate of interest.
- How the rate interest is computed.
5. Disbursement:
a. Full disbursement: Home loan company releasing the total payment to the seller. Loan company disburse the cheque when you submit the all the documents needed and have made a down payment. If home is a resale , then the cheque is given in the name of seller. If you purchase home from a builder, cheque will come in the builder's name.
b. Partial disbursement: all the payment is not released by the home loan company. Disbursement is made in stages in partial disbursement. All the payment is not released at once and it released in stages. In case of purchasing of an apartment from builder and it in under construction. For instance 20% of the payment is paid after completion of the first floor. And 40% of loan will be released after completion of second floor and so on.
