Crucial Factors to Keep in Mind While Applying for a Property Loan

There are quite a few factors, which one should keep in mind while applying for property or mortgage loans. These crucial factors regarding property loans are discussed underneath in detail.

• Eligibility and document requirements: The source of income, age, and many other factors are considered to determine eligibility. Further, prospective borrowers need to have all the necessary documents handy as well.
• Loan amount and LTV: Applying for a loan amount which is considerably lower than eligible Loan-to-Value or LTV of can help in loan approval as well as in availing the loan at more affordable interest rates. 
• Interest rates: It is important to check and compare mortgage loan interest rates before selecting a specific financial institution for loan application. Competitive interest rates can greatly reduce the total cost of loan. 
• Impact of tenor: Typically, a lower tenor leads to reduced interest rates since lenders do not have to carry the risk of forfeiture or default on loan for a longer period of time. 
• Prepayment norms: It is important to check the prepayment norms, which are applicable on a loan. Prepaying a loan against property can save immense interest payment. Thus, it is important to check the availability of this feature as well as the relevant charges on them. 
• Tax benefits offered: Borrowers can avail quite a few tax benefits under Section 80C and 24b of the Income Tax Act. Consequently, borrowers should check all these exemptions to minimise their expenses. 

Keeping the above factors in mind can especially help in choosing the right property loan while selecting the financial institution. Furthermore, it also helps in planning the repayment of the loan.