Pointers for good home loans::CEO, BankBazaar.com in Business Line

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We are planning to take up a home loan. Kindly advice me, regarding the various home loans and EMI plans.

— Anis Hansari

Before approaching a bank for your home loan, there are a few things you might like to make sure of. Here is a partial checklist to help you customise one before you opt for a loan.

* Do you have enough down payment?

You are now expected to shell out 20 per cent of the property value as down payment, while the rest will be provided as the loan from your bank. Also, stamp duty, registration and such charges will now be excluded from your home loan, which means you need to make allowance for that as well.

* Should you opt for a floating interest rate loan?

Banks do offer fixed and floating interest rate loans. Floating interest rate loans are a better bet in the current interest rate climate, as after several consecutive rate hikes last year, things are expected to take a downturn now, and interest rates are expected to fall. To make sure you can benefit from this, it's best to opt for a floating interest rate loan.

* Are you loan eligible?

Make sure that you have a good credit repayment record. For instance, if you use your credit card regularly, make sure that you have made all your payments within your due date, and have paid the amount due in full. This is important, as banks check how you have dealt with different forms of credit in the past. This includes credit card repayments and past loan repayments, like a car loan or personal loan.

Banks usually lend you around 40 per cent of your income as a loan. If you feel that may not help your cause, try to club your income with your earning spouse or parent, to increase the loan amount you are eligible for. Make sure you have 3-6 months of EMI shored up at the bank, apart from sufficient down payment, and funds related to home purchase and furnishing. This will make sure you aren't stumped in case of an emergency.

* Check the bank and builder's performance record.

Try to locate a pre-approved property, as loans will get easily sanctioned for such properties, as they would have already been approved choices for a loan, having passed the stringent verification processes of the bank.

Also, check the bank's performance record, how its past loan customers perceive it etc, so that you have peace of mind during the loan repayment period.

(Adhil Shetty, CEO, BankBazaar.com, will respond to questions

on home loans