which things you should consider before taking home loan?
Home loan is a concept that is not new anymore. Especially the educated industry professionals having some exposure the local and international markets are exploiting this product offered by almost all Pakistani banks and other housing finance companies. This is an efficient way of purchasing a home that you have been dreaming about.
Although taking a home loan seems a risky matter but with ample understanding of the procedure, insight into the mechanism of banks and their terms and conditions on packages they are offering can empower yourself for picking the best home loan in Pakistan.
It is also a critical decision to choose whether you should go with a fixed rate home loan or variable rate home loan product. Such assessment helps you to match your budget in hand and also results in little or no negative impacts on your regular monthly family budget.
Acknowledging the Reality about EMI’s
Equated monthly installments (EMI’s) are very special elements of the overall concept of a best home loan offer. It is a vital issue that should be catered with due diligence. Considering a realistic figure for repaying your home loan in form of installments will save you from household financial crisis or low credit score. Following are the key points that are needed to be considered for securing and managing a home loan that will save you from the both aforementioned dark scenarios and yet aligned with your monthly budgets:
1- Expect A Major Shift in Your Life Style
Money is a major component for any kind of life style. Selecting an EMI without keen understanding of the way you spend money for keeping a kind of life style can get you in trouble. You will either have to stop travelling, outside dinning and recreations like that or end up being defaulted.
2- Consider Expenses in the Long Run
In order to keep your track record tidy double check the possibilities and expenses that can spoil or become cause of failure of the lending process. The upheavals that can effect and increase your medical, family, lifestyle, kids, or personal expenses should be taken in consideration. Otherwise no matter what efforts you may put your life will be upside down financially. So, choose a figure for EMI that you feel comfortable with in the long run.
3- Length of Your Loan Tenure
Going for an EMI that is big suits those people who wants to pay their loan without having to keep lingering for decades. The rest with a lighter wallet can go for tenure of 15-20 years. Understand and plan your financial situation in the coming year and decide on an EMI accordingly for avoiding troublesome situations.
4- Your Current Age and EMI’s
As a young person in your 20’s it may be suitable to considering taking a home loan with heavy EMI’s and by paying these can manage to get rid of the debt early and easily. This is because during these years of life you are highly determined and do not have much on your table to spend on.
The case is otherwise for a person in his 30’s or 40’s because of the fact that EMI’s extracts a big part from your salary/income and the result is either low credit score or money shortage for household expenses when you are also supporting family commitments including kids and their education.
5- Variations in the ROI
If the KIBOR rates are low, then State Bank’s KIBOR rate linked home loans are logically preferable because the rate of interest in these will vary with the passage of time and it gets you the insight to be ready for the estimated change in your monthly EMI.
However when KIBOR rate is high and inflation is growing, it is better to choose a fixed rate loan so that you are fully aware of all the expenses tied up with your home loan. Lay hands on the best home loan rates in Pakistan by comparing home loans at mawazna.com and step into your dream home with cost effectiveness and comfort.
6- Get Best Deals Matching with Your Source of Income
Usually, an employed person with permanent job and promising career is eligible for a best home loan offer only if he will be able to take 40-45% per month out of their salary for monthly installment to pay back his home loan. The ratio is usually little increased for a businessman or a self-employed person with a well-founded and developing business as that offers more risk due to the liquid nature of businesses.
Both salary and income earners need to be 100% sure that they can accommodate and maintain this percentage for the defined period of time in order to avoid being a defaulted customer.
The information that this article is providing you enables you to prepare yourself for what future might have to offer. Along with this insight into home loan plan and strategy as prerequisites, you can also go for expert advice on mawazna.com. It provides you with an authentic comparison of the various home loans based on the specific purposes you need a best home loan in Pakistan. So, visit us for clearer understanding of home loans and its validity for making the right decision for yourself and your loved ones.