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.

Team Mawazna asked this on Dec 5, 2017 Posted in Money Clamp0 answers

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